Main Macro Events This Week

This is a shortened trade week since Friday is a Bank Holiday for the major Central banks with U.S. and European markets closed on Friday.

• Europe: The European economic calendar will remain light as we head into the end of the year and with the lack of E.U. data we would expect for the EURUSD pair to trade within a range in the wake of the risk events from the U.S. Fed and the ECB are now out of the way. German markets will already be closing down for Christmas Eve on Thursday and all markets will be closed for Christmas Day Friday. The calendar is quiet, with only German and Eurozone consumer confidence numbers of note (Monday, Tuesday, respectively), which are expected to remain for the most part stable. The final reading of French Q3 GDP (Wednesday). French consumer spending also on (Wednesday) is expected to rebound from the marked dip in October and rise 0.6% m/m in November.

• United States: The U.S. will still have several more economic data releases until the end of the year, starting with the Chicago Fed National Activity index (Monday), this will be followed by the third update on Q3 GDP (Tuesday) forecast to be revised down to 1.8% from 2.1% originally and 3.9% in Q2. FHFA home prices may tick up to 227.0 in October from 226.5, while existing home sales may run 0.7% higher to a 5.40 mln unit pace in November. The Richmond Fed index is set to rise to -1 in December vs -3 previously. The MBA mortgage application report is due (Wednesday) and could be impacted by the advent of the Fed decision midweek. Durable goods orders are expected to retreat 1.5% in November (median -0.7%) after a 3.0% gain in October, while personal income and spending may rise 0.3% in November. Final Michigan sentiment should be nudged up to 92.0 in December from 91.8 initially and new home sales are forecast to rise 2.0% in November to a 505k unit pace from 495k. Initial jobless claims may tick up 1k (Thursday) to a 272k level.

• Canada: A holiday shortened week will be highlighted by October GDP (Wednesday) , Retail sales also (Wednesday) are expected to show an 0.8% m/m gain in October following the 0.5% drop in September while the ex-autos aggregate is seen rising 0.5% after a 0.5% decline. Average weekly earnings (Tuesday) are seen rising 0.3% m/m in October after the 1.0% surge in September. Bank of Canada’s Governor Poloz will deliver a presentation on the global economy and Canadian monetary policy at the Canada’s Finance Ministers meeting in Ottawa on Sunday and Monday (Dec 20 and 21). The next top tier event from the bank is a speech from Governor Poloz on January 7th.

• United Kingdom: The markets are anticipating that the UK’s version of rate liftoff will be around six months after the U.S., with a hike seen in the middle of 2016. This week the U.K. has on tab the; CBI distributive sales survey for December (Monday) where analyst expect a solid rebound to a +20 reading in headline realized sales (median +21), up from +7 in November. Growth in real household incomes, despite recent abatement in nominal growth, has been underpinning consumption. Analyst anticipate the December reading of the Gfk consumer confidence survey (Tuesday) to come in unchanged at +1 (median same). Monthly government borrowing data are also due (also Tuesday), as is the final release of Q3 GDP (Wednesday), which analyst expect to remain unchanged at 0.5% q/q and 2.3% y/y. Q3 current account data (also due Wednesday) is expected to reveal a deficit of GBP 21.5 bln, mostly reflecting the UK’s trade deficit and net negative investment returns.

• Switzerland: The Swiss calendar is light, featuring trade data (Tuesday) the December KOF leading indicator (Wednesday), both of which should highlight that the Swiss economy continues to manage well in the face of Eurozone uncertainties and a strong franc.

• Japan: October all-industry index (Monday), which is expected to rebound 0.5% m/m from the -0.2% outcome in September. Activity slows until the end of the week with the minutes to the November 18, 19th BoJ meeting (Thursday). Friday’s slate is heavy. November national CPI is seen steady at 0.3% y/y on an overall basis, and accelerating to 0.1% y/y clip from the prior -0.1% on a core basis. December headline Tokyo CPI is expected to slow to unchanged y/y from 0.2% previously, while core should be steady at unchanged y/y. November unemployment is forecast steady at 3.1%, with the job offers/seekers ratio holding at 1.24. November personal income likely dipped to 2.0% y/y from 2.6%, while PCE is seen contracting further to -2.5% y/y from -2.4% in October. November services PPI should ease to 0.1% y/y from 0.5%.

• Australia: The AUD calendar is empty this week, and remains without of top tier data until the first week of January. Markets will be closed in Australia on Friday for the Christmas holiday, with many remaining shut through Monday. The RBA takes its customary intermission from appearances or events during January, with the February 2 meeting the next event on their calendar. The RBA left rates at 2.00% in the December 1st meeting, and our base case is for steady policy to begin the New Year.

• New Zealand: The NZD calendar has November trade (Wednesday), expected to reveal an improvement in the trade deficit to -NZ$800 mln from the -NZ$963 mln deficit in October. There is nothing from the RBNZ this week following the well-anticipated 25 basis point cut earlier this month that left the official cash rate at 2.50%. The bank’s next meeting is on January 28th, and we project no change in the current policy setting.

Janne Muta

Chief Market Analyst

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