Following a busy week ending with a Conservative victory in the UK election and rising hopes of a potential trade deal between UK and China, attention turns to the BoJ, PBoC and BoE monetary policy meetings next week. However, the developments on the US-China trade front will remain front and centre.
Monday – 16 December 2019
- Manufacturing PMI (EUR, GMT 08-30-09:00) – The prel. November manufacturing PMI was revised up to 46.9 from 46.6, despite the signs that the weakness in manufacturing is starting to spread. The European PMI for December meanwhile is expected to released at 47.4.
- Manufacturing PMI (GBP, GMT 09:30) – The UK PMI is expected to register an upwards reading to 50.7 after the upwards revision last week at 48.9.
Tuesday – 17 December 2019
- RBA Meeting’s Minutes (AUD, GMT 00:30) – The RBA minutes provides a detailed assessment of the bank’s most recent policy-setting meeting, containing in-depth insights into the economic conditions that influenced the rate decision. They are usually a cause for FX turbulence.
- Employment and Earnings (GBP, 09:30) – Average earnings are expected to have increased by 3.8% in October, above the 3.6% the previous month. The ILO unemployment rate (3M) for October could rise at 3.9% from 3.8%.
Wednesday – 18 December 2019
- German IFO (EUR, GMT 09:00) – The German Business Sentiment Index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. December’s numbers are expected unchanged.
- Consumer Price Index (GBP, GMT 09:30) – The UK inflation is seen unchanged to the downside in December, at 1.5% y/y, the lowest rate seen since November 2016 and after 1.7% in September. The core should be steady as well at 1.7%.
- Consumer Price Index (EUR, GMT 10:00) – Prices are expected to have eased slightly in December, with overall inflation expected to remain at 1% y/y, while core inflation at 1.3% y/y.
- Consumer Price Index (CAD, GMT 13:30) – The overall Canadian CPI and core should hold close to target, while the November Core outcome is expected to slip to -0.2% following the 0.4% jump in October.
Thursday – 19 December 2019
- Interest Rate Decision and Conference (JPY, GMT 03:00) – In the last meeting, BoJ kept its short-term interest rate target at -0.1% and its pledge to guide 10-year JGB yields around 0% while maintaining its asset buying program. The central bank signaled its commitment to keep interest rates at current levels “for an extended period of time, at least through around spring 2020”. BoJ Governor said in his statement that cutting rates further are a possible policy option, adding that he doesn’t think that Japan is near the reversal rate. He also said that he doesn’t think the BoJ needs to change the forward guidance now. Hence this is likely to remain the scenario in this week’s Monetary Policy Statement.
- Interest Rate Decision (GBP, GMT 12:00) – BoE should remain on hold until Brexit has been resolved. Thus, consensus forecasts suggest no change in the policy rate in this meeting, however an uTwo of the nine-member MPC dissented in favour of cutting the repo rate by 25 bps
Friday – 20 December 2019
- Gross Domestic Product (USD, GMT 13:30) – A Q3 GDP growth is expected up to 2.2% from 2.1%, with a -$1 bln trimming for factory inventories alongside a $4 bln hike for construction. The Q4 GDP growth estimate sits at 2.4%, with support from recent reports indicating a -4% Q4 drop in imports that adds to GDP, likely firmness in government purchases, a rebounding residential investment sector, and an expected bounce in equipment spending.
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