Week Ahead

The US and China will be publishing inflation and foreign trade updates in the coming week, while central banks in Canada, Australia, India and Brazil decide on monetary policy. Other important data to follow include US consumer confidence, UK October GDP data, German investor morale and factory orders, Japan current account and producer prices, and India industrial output.

It is a relatively busy week ahead in the US on the economic data front. The latest consumer price report will probably show the inflation rate jumped to 6.7 percent in November, its highest since June 1982 and well above the Federal Reserve’s target of about 2 percent. At the same time, the preliminary estimate of Michigan consumer sentiment for December will likely show a further deterioration in morale to the weakest level since November 2011 amid soaring energy prices and concerns over the spread of the new Omicron coronavirus variant. Other publications to watch for are foreign trade, IBD/TIPP Economic Optimism, JOLTs job openings, the government’s monthly budget statement, and the final readings of wholesale inventories and third-quarter labor productivity.

Elsewhere in America, the Bank of Canada is seen holding interest rates at record-low levels on Wednesday, while policymakers in Brazil will likely hike rates by 150bps to curb rising inflation. Other important releases to follow include Canada trade balance and the Ivey PMI survey; Mexico inflation rate, industrial output and consumer morale; Brazil consumer prices, retail trade and business morale; Argentina industrial output; and Chile inflation and foreign trade.

In the UK investors will turn their attention to monthly GDP figures, alongside industrial production, construction output, trade balance, Halifax House Price index, and Markit Construction PMI. Figures from the ONS are expected to show another month of steady growth at the start of the fourth quarter with industrial activity returning to growth after a setback in September.

Elsewhere in Europe, the Eurozone will be releasing the final estimate of third-quarter GDP, while Germany is set to publish the ZEW Economic Sentiment Index. Investor sentiment in Europe’s largest economy likely deteriorated in December amidst growing concern about the spread of the Omicron variant and following the reimposition of strict restrictions on unvaccinated people, in a bid to encourage vaccine uptake as the country faces the most severe wave of Covid so far. Traders will also keep an eye on German factory orders, industrial production and foreign trade; France trade balance; Italy retail trade and industrial output; Spain consumer confidence; the Netherlands and Russia inflation rates; and Switzerland and Turkey unemployment rates.

In the Asia-Pacific region, China will be publishing inflation data for November, with markets pointing to the fastest increase in consumer prices since July 2020 as well as a slowdown in producer price rate from October’s record high. Meanwhile, Japan is releasing the final figures of third-quarter GDP, alongside current account, producer prices, household spending and Eco Watchers Survey Outlook.

Meanwhile, the Reserve Bank of Australia and the Reserve Bank of India will hold their monetary policy meetings, but no changes are expected. On the economic data front, important releases for Australia include Ai Group services index, third-quarter house prices and the final estimate of building permits; while in India industrial production will be in the spotlight.

Other highlights include: Taiwan consumer and wholesale prices, and trade balance; Malaysia industrial output; and the Philippines inflation rate.

Categories: Markten