London, Saturday, 10 December 2022
The Fed's decision on interest rates and the release of the CPI report will take centre stage during this hectic week in the US. Additionally, monetary policy meetings for the Bank of England, the European Central Bank, the Swiss National Bank, and the Bank of Mexico will take place, while data on inflation will be released for the UK, India, and South Africa. Investors will also monitor China's industrial production and retail sales, as well as the ZEW Economic Sentiment for Germany. Finally, flash PMI figures for significant developed economies like the US, UK, Euro Area, and Australia will be made public.
While the monthly CPI is predicted to rise just 0.3% in November, the annual inflation rate in the US is projected to decelerate to 7.3%. Core CPI probably increased 6.1% year over year at the same time, the slowest increase in 4 months. Following four straight 75 bps rate hikes, Fed officials are expected to increase rates by 50 basis points the following week. However, only a 25bps rate increase in January could be taken into consideration if inflation continues to decline. Inflation, economic, and interest rate estimates for the next three months will also be made public by the US central bank.
The retail sales data will be released the following week as well. Predictions call for a 0.1% month-over-month decline, which would indicate that consumer demand is being hampered by tighter financial conditions. S&P Global manufacturing and services PMI, export and import prices, industrial production, and the Philadelphia Fed Manufacturing Index are among the other releases.
Canada will release the most recent information on house starts and the November housing price index. Brazil will present data on business confidence, while Mexico's Central Bank will make its monetary policy announcement.
All eyes will be on the ECB interest rate decision in Europe, where markets anticipate a modest 50 basis point increase after two successive 75 basis point increases. Additionally, investors will closely monitor fresh macroeconomic forecasts. A report on monetary policy will also be provided by the Swiss National Bank, the Norges Bank, and the Central Bank of the Russian Federation. Preliminary PMI readings for this month's private sector activity will be released for the Eurozone, Germany, and France at the same time. Predictions point to another contraction in both services and manufacturing.
The final inflation data for the Euro Area, Germany, France, Italy, and Spain; industrial production for Italy and the Euro Area; and the inflation rate and final projections for Russia's GDP growth for the third quarter will all be intriguing to watch. Investors will closely monitor political developments around the EU gas price accord before a ministerial meeting on Tuesday. Currently, a cap of €220 per megawatt hour is being explored.
All eyes in Asia will be on Chinese retail sales and industrial production figures for November to gain further understanding of the economic impact of the severe Covid lockdowns. The unemployment rate, housing costs, and fixed investment during the time period are further releases. The Tankan Manufacturers Index, international trade information, and flash PMI readings will be the main topics of discussion in Japan. In India, the retail inflation for November is anticipated to drop but still remain above the RBI's upper target of 6% for the 11th consecutive month. The trade balance and industrial production growth are also being watched. Investors anticipate a number of rate-setting central bank meetings that are anticipated to follow the Federal Reserve's decision.
Investors in Australia will be interested in the November employment statistics, flash PMI prints for December, Westpac consumer confidence, and NAB business confidence. Data on Q3 GDP growth and November PMI will be the main topics of discussion in New Zealand.
(Research and Report by: The Decision Maker - Finance editors)