Markets will have a light economic calendar in the week ahead of the Christmas holidays. This will give investors the time to digest the last week’s central banks meetings updates and to think about their portfolios in 2023 to overcome the difficulty of finding where to invest.
The FOMC hiked rates by 50bp last week taking the cash rate to a 15-year high at 4.5% and 17 out of the 19 members expected that the US interest rates would be above 5% by the end of 2023. The Fed Chair welcomed the fall in inflation levels in October and November nonetheless, Powell highlighted that the central bank’s monetary policy is not at sufficiently restrictive policy yet and for that reason, he expected that the ongoing hikes would be appropriate.
The ECB board members hiked rates by 50 bp last week and hinted that there might be more hikes of 50 bp in the upcoming meetings, and while other central banks have started to slow down their rate hike pace, the ECB policy may stay tight for a while and take the European economy to a restrictive territory on the back of the Eurozone CPI high levels (10.1% in November).
The Bank of England hiked the rate by 50 bp last week taking the UK interest rate to 3.5%. The new policy statement contained some dovish signals as the committee expected the rate to peak at 4% hinting at another 50 bp hike in February followed by a rate hike pause the MPC nonetheless, warned that it could act if required.
Most US major indices closed in the red on Friday as investors did not like the Fed’s hawkish message. The US dollar recovered its losses and the Gold closed below the $1800/oz threshold. The oil price bounced back on better demand as China seemed to abandon the Covid Zero policy and the Biden administration plans to refill the US strategic reserves.
Economic data highlights
Monday 19th of December
Tuesday 20th of December
- USD- NAHB Housing Market Index (DEC)
Wednesday 21st of December
- RBA Meeting Minutes
- BoJ Interest Rate Decision
- CAD- Retail Sales (OCT)
- USD- Building Permits (NOV)
- EUR- Consumer Confidence Flash (DEC)
Thursday 22nd of December
- EUR- GfK Consumer Confidence (Germany-JAN)
- CAD- Inflation Rate (NOV)
- USD- CB Consumer Confidence (DEC)
- USD- Crude Oil Inventories
Friday 23rd of December
- GBP- GDP Growth Rate Final
- USD- GDP Growth Rate (Q3)
- USD- Core PCE Prices (Q3)
- JPY- Inflation Rate (NOV)
- CAD- GDP Growth Rate
- USD- PCE Price Index (NOV)
- USD- Durable Goods Orders MoM (NOV)
- Michigan Consumer Sentiment Final (DEC)
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