Investors will get busy with a packed economic calendar this week. Inflation and unemployment numbers in the US and elsewhere will be among the data traders will follow and adjust their portfolios accordingly. Additionally, markets will tune in to heads of central banks speeches such as the Fed and the ECB to find out their thoughts about their economies, and to get some hints about the potential monetary policy in the next year.
The FOMC minutes of the previous Fed meeting showed a dovish surprise as the central bank’s officials discussed possible smaller rate hikes. Hence, markets expect less aggressive rate increases in the upcoming meetings, starting with a 50 bp rate hike rather than 75 bp on December 14th
, and between 25 to 50 pb in Q1-23 (depending on the inflation data).
Based on that the US dollar lost nearly 2% of its value last week, while some currencies like the Pound sterling rallied to a multi-month high against the US Dollar. Commodities, such as gold stabilized above $1750/oz giving the US dollar with the 10 years treasury yields retreat, while the oil price hit a multi-month low on prospects of lower demand due to China’s unrest on one hand and a possible global recession on the other.
Economic data highlights
Monday 28th of November
Tuesday 29th of November
- ECB President Lagarde’s Speech
- Fed Williams Speech
Wednesday 30th of November
- JPY- Unemployment Rate (OCT)
- JPY- Retail Sales (OCT)
- CHF - GDP Growth Rate (Q3)
- EUR- Consumer Confidence Final (NOV)
- EUR- Economic Sentiment (NOV)
- EUR- Inflation Rate (Germany- NOV)
- CAD- GDP Growth Rate (Q3)
- USD- CB Consumer Confidence (NOV)
- USD- House Price Index MoM (SEP)
Thursday 1st of December
- JPY- Industrial Production (OCT)
- CNH- NBS Manufacturing PMI (NOV)
- EUR- Unemployment Rate (Germany-NOV)
- EUR- Core Inflation Rate Flash (NOV)
- USD- ADP Employment Change (NOV)
- USD- GDP Growth Rate (Q3)
- Fed Cook Speech
- Fed Chair Powell’s Speech
Friday 2nd of December
- AUD- Global Manufacturing PMI Final (NOV)
- BoJ Kuroda Speech
- EUR- Retail Sales (Germany-OCT)
- CHF- Inflation Rate (NOV)
- EUR- Global Manufacturing PMI Final (NOV)
- GBP- Global/CIPS Manufacturing PMI Final (NOV)
- USD- PCE Price Index (OCT)
- USD- ISM Manufacturing PMI (NOV)
- CAD- Global Manufacturing PMI (NOV)
- Fed Bowman Speech
- Fed Logan Speech
The US Data Most Awaited Data
- RBA Gov Lowe Speech
- ECB President Lagarde’s Speech
- CAD - Unemployment Rate (NOV)
- USD- Non-Farm Payrolls (NOV)
- USD- Unemployment Rate (NOV)
- Fed Evans Speech
The US markets traders will watch the manufacturing ISM read of November as it is expected to fall below the 50-threshold, indicating that the economy is generally declining.
Investors will follow the core personal consumer expenditure index rate of October (the Fed’s favorite measure of inflation) which is expected to fall from 5.1% to 5.0%. Any lower-than-expected read highlights the Fed’s success in pointing the inflation rate in the correct direction and this could send the US dollar to trade even lower.
Markets expect the NFP report on Friday to show that the US economy added in November 200K jobs while the unemployment rate remained at 3.7%. It should be noted that we could see higher unemployment rates in the coming months due to big layoffs from tech giants caused by reasons such as uncertain economic outlooks and lower profits.
The Eurozone Inflation Rates
The Euro markets traders will focus on the November inflation read as it will be very related to the December rate hike decision. Markets expect the inflation headline in the Eurozone to decelerate from 10.6 to 10.4 as energy prices have been moderating and the supply chain disruption has been fading.
Therefore, it is likely to see the ECB hiking rate by 50 bp in its last meeting in 2022.
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