Main Macro Events This Week

• United States: This weeks market highlight is going to be the FOMC meeting on Wednesday, U.S. Fed policy makers are widely expected to start moving interest rates higher with the first small rate hike seen this week; traders should understand that this would be the first rate hike since the the middle of 2006. The expected rate increase is for 25 bps, this would push the Feds’s target range to 0.25% to 0.50%. It should also be noted that the markets have been pricing in an expected rate increase for a few weeks already, so traders should expect the short term market reaction to create choppy trading conditions in the wake of this Wednesdays FOMC Statement and release of the U.S. Federal Funds Rate.

• Canada: On tap for Canada is the CPI (Friday) and is expected to accelerate to a 1.4% y/y pace in November from the 1.0% rate that prevailed in September and October. The Bank of Canada’s core CPI index is seen growing by analyst 2.2% y/y in November following the stable 2.1% growth in August, September and October. Core CPI is expected to fall 0.1% m/m in November after the 0.3% gain in October. Manufacturing shipments (Tuesday) are seen falling 0.5% in October after the 1.5% drop in September. But wholesale shipments (Friday) are seen rising 0.5% in October after the 0.1% dip in September. We will also see two more housing releases: the always interesting existing home sales report for November (Tuesday) and the November Teranet National Bank Housing Price Index (Monday). Also of interest will be the national balance sheet and financial flows accounts release from Statistics Canada (Monday), which will contains the debt to disposable income ratio. The ratio rose to a record high 164.5% in Q2 and a further expansion is expected. International transactions in securities for October is due on Wednesday. The Bank of Canada publishes the Financial System Review (Tuesday). The Review, which is published twice a year (June and December) will be followed by a press conference held by Governor Poloz and Senior Deputy Governor Wilkins.

• China: China released November industrial production and retail sales over the weekend and better than expected results could provide some offset to the sharp sell off in stock markets on Friday. Production posted a 6.1% y/y growth rate, with retail sales at 11.2% y/y.

• Japan: The BoJ meets (Thursday, Friday) and is not expected to make any changes. Recent data has improved a bit, the December Tankan index (Monday) is expected to fall to 10 from 12 for large manufacturers, and to 23 from 25 for large non−manufacturers. The October tertiary index (Monday) is seen improving to up 0.5% m/m from the prior −0.4% reading. Revised October industrial production (Monday) is seen unchanged at 1.4% y/y. The November trade report (Thursday), should show drop to a deficit of JPY 500 bln, versus a revised JPY 108.3 bln surplus. Exports, in particular, will be the focus.

• Australia: Focus will be on the minutes of the RBA’s December meeting (Tuesday). Assistant Governor (Financial Markets) Guy Debelle delivers a speech titled “Some Effects of the New Liquidity Regime” to The Australasian Finance and Banking Conference, (Wednesday). The date calendar is thin, but does have the Q3 home price index (Tuesday), which we expect will grow 2.0% (q/q) after the 4.7% gain in Q2.

• New Zealand: the NZD calendar has Q3 GDP (Thursday), expected to improve to a 0.5% growth pace (q/q, sa) following the 0.4% rate of expansion in Q2. The current account (Wednesday) is seen worsening to a −NZ$4.5 bln deficit in Q3 from the −NZ$1.2 bln shortfall in Q2. There is nothing from the RBNZ this week following the well−anticipated 25 basis point cut that left the official cash rate at 2.50% last week.

• Eurozone: Some ECB speak comes from ECB President Mario Draghi later today. On tab the data releases include December confidence data, but are unlikely to change the picture much. At least for now, the ECB seems to be done with further easing and it looks like nothing much is going to happen until March. The ECB’s economic bulletin on Thursday is likely to confirm this picture.

• Germany: The ZEW Investor confidence on (Tuesday) is seen rising slightly to 11.2 (med 17.3) from 10.4 in the previous month, although analyst view the risk is to the downside as the ongoing sell off in commodities has been weighing on stock markets and investor confidence. The German Ifo Business Climate reading meanwhile should benefit somewhat from the rebound in manufacturing orders and analyst are looking for a marginal rise to 109.1 (med 109.0) from 109.0 in the previous month. Eurozone Markit PMI − Manufacturing − Flash readings also expected to hold pretty steady with the manufacturing number seen steady at 52.8 (med 52.7) and the services reading steady at 54.2 (med 54.1), which should leave the composite unchanged at 54.2 (med 54.1).

• United Kingdom: November data for inflation (Tuesday), labor market (Wednesday), and retail sales (Thursday) highlight, while the December CBI industrial trends survey is also up (Thursday). The labor market data will be a key focus as the minutes to last week’s December BoE meeting showed the Monetary Policy Committee highlighting the recent decline in nominal pay growth, which was taken by markets as a dovish shift in thinking, in turn dampening expectations for a BoE rate hike.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Main Macro Events This Week

• United States: The U.S economic calendar is heavy at the start of the new month, with several important reports due this week, NFP for November employment numbers (Friday). An increase of 200k is forecast, with a steady 5.0% unemployment rate. Those should be more than strong enough to support expectations for rate liftoff. Other market moving data includes the ADP number (Wednesday), expected to show private payrolls rising 190k. ISMs are due, with the manufacturing index (Tuesday) expected to edge up to 50.5 from 50.1. The services index (Thursday) is projected to slip to 57.5 from 59.1, though still reflecting solid growth in the sector. Fed Chair Yellen speaks on monetary policy (Wednesday, Thursday), Yellen will also address the Economic Club of Washington (Wednesday), and then she testifies before the JEC (Thursday). Her speech should reiterate that a rate hike is likely appropriate this year.

• Canada: The BoC’s policy announcement (Wednesday) highlights a busy week for Canadian data. Analysts expect no change to the current 0.50% policy setting, alongside a repeat of the bank’s constructive view on the growth and inflation outlook. The economic data calendar has November employment (Friday), expected to fall 10.0k after the 44.4k surge in October. The unemployment rate is seen at 7.0%, matching the 7.0% in October. Real GDP (Tuesday) is seen rebounding to a 2.3% growth pace in Q3 (q/q, saar) after contracting 0.5% in Q2. But September GDP (Tuesday) is seen flat following the 0.1% gain in August. The trade deficit (Friday) is anticipated to improve to a -C$1.5 bln in October from the -C$1.7 bln shortfall in September. Productivity (Friday) should rise 0.2% in Q3 (q/q, sa) after the 0.6% decline in Q2 as rising hours are outpaced by the expected retu rn to GDP growth. The current account deficit (Monday) is projected to narrow to -C$14.5 bln in Q3 from -C$17.4 bln in Q2. The Ivey PMI (Friday) is expected to improve to a seasonally adjusted 54.0 in November from 53.1 in October.

• Europe: The immediate focus is on the ECB meeting (Thursday), with markets looking to Draghi again. There remains the likely scenario for a cut in the deposit rate. Data releases this week , German HICP (Monday) , the overall Eurozone CPI reading (Wednesday) is seen at 0.3% y/y (median same), up from 0.1% y/y. Headline rates, as well as core inflation, have been trending higher, though that hasn’t stopped Draghi and Constancio from reviving talk about deflation risks in the Eurozone.

• UK: This week’s calendar features the BoE lending data for October (Monday). The Markit PMI surveys will be released too, starting with the manufacturing sector survey (Tuesday), followed by construction PMI (Wednesday) and services PMI (Friday).

• Japan: Preliminary October industrial production (Monday)is seen falling 0.5% m/m, versus the 1.1% gains seen in September. October retail sales (Monday) are expected up 0.5% y/y from the prior 1.7% gain for large retailers, and down 0.5% from -0.2% overall. October housing starts (Monday) are seen up 2.5% y/y from 2.6%, while October construction orders (Monday) are also due. The Q3 MoF capex survey (Tuesday) is forecast to rise 1.0% y/y from the previous 5.6% rise. November Markit/JMMA PMI (Wednesday) is penciled in at 52.8 from 52.4. November consumer confidence (Friday) likely advanced to 41.6 from 41.5.

• China: PMI reports (Tuesday) are on tap. The official CFLP November manufacturing PMI is expected to fall to 49.5 from 49.8. The Caixin/Markit PMI outcome is seen at 48.2 from 48.3, while the services PMI is forecast to rise to 53.0 from 52.0.

• Australia: The AUD calendar is highlighted by the RBA’s meeting (Tuesday). Analyst expect no change to the current 2.00% rate setting, but economic data has been disappointing of late so the risk is skewed towards another 25 basis point rate cut. The economic data calendar is busy. GDP (Wednesday) is expected to improve to a 0.5% growth rate in Q3 (q/q, sa) following the 0.2% gain in Q2. The current account (Tuesday) is seen narrowing to a -C$17.0 bln deficit from -C$19.0 bln in Q2. Building approvals (Tuesday) are expected to fall 2.0% in October following the 2.2% gain in September. The trade deficit (Thursday) is seen worsening to -A$2.8 bln in October from -A$2.3 bln in September. Retail sales (Friday) are expected to raise 0.3% m/m in October following the 0.4% gain in September. The TD-MI inflation gauge is expected to raise 0.1% m/m in November after the flat reading in October.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.