On the Macro
For the Dollar, it’s another busy week ahead, with key stats including October JOLTs job openings on Monday, November wholesale and consumer price inflation numbers due out on Tuesday and Wednesday. A heavy day of stats on Friday includes October business inventories, November retail sales, and industrial production numbers and prelim December private-sector PMI numbers. Thursday’s import and export price index and weekly jobless claims figures will unlikely to have a material impact. Outside the numbers, expect Oval Office chatter, with the markets also likely to be second guessing whether the FED will take a more dovish outlook on rates for 2019. The Dollar Spot Index ended the week down 0.78% to $96.514.
For the EUR, Key stats include October Trade and economic sentiment numbers due out of Germany on Monday and Tuesday, Eurozone industrial production numbers on Wednesday, with prelim December private-sector PMI numbers for France, Germany, and the Eurozone, together with the Eurozone’s 3rd quarter wage growth figures due out on Friday. While finalized November inflation figures due out in the 2nd half of the week will likely be ignored, we can expect plenty of movement on the ECB monetary policy decision and more importantly, the ECB press conference. The EUR/USD ended the week up 0.55% to $1.1379.
For the Pound, stats include October GDP, trade and production figures due out on Monday and employment numbers due out on Tuesday. While the numbers usually provide plenty of direction, the focus will be on the 11th December Parliamentary vote on the Brexit deal that will have the Pond on the move, whatever the outcome. The GBP/USD ended the week down 0.18% to $1.2726.
For the Loonie, it’s a relatively quiet week ahead, with stats limited to housing sector data through the week that will likely have a relatively muted impact on the Loonie, with crude oil prices and market risk appetite in general to provide direction. The Loonie ended the week down 0.23% to C$1.3322 against the U.S Dollar.
Out of Asia, it’s another busy week ahead.
For the Aussie Dollar, stats include October home loan and 3rd quarter house price figures due out on Monday and Tuesday, with the more influential business and consumer confidence numbers due out on Tuesday and Wednesday respectively. On Friday, employment numbers will round off a relatively busy week, with concerns over the housing sector likely to make the Aussie Dollar more sensitive to the housing sector numbers, though it may all boil down to sentiment towards trade and the state of China’s economy by the end of the week. Outside of the stats, the RBA Bulletin due out on Thursday will need to be looked out for. The Aussie Dollar ended the week down 1.33% to $0.7209.
For the Japanese yen, economic data includes 3rd quarter GDP numbers on Monday, the BSI Large Manufacturing Conditions Index number for the 4th quarter on Tuesday, with 4th quarter Tankan numbers and October finalized industrial production figures due out on Friday. The Japanese Yen ended the week up 0.77% to ¥112.69 against the U.S Dollar.
For the Kiwi Dollar, stats are limited to November credit card sales figures due out on Monday and November’s business PMI on Friday, both sets of numbers expected to influence the Kiwi. The Kiwi Dollar ended the week down 0.09% to $0.6866.
Out of China, economic data is limited to November fixed asset investment and industrial production figures due out on Friday, with market risk sentiment to be dictated by the numbers at the end of the week, with China’s retail sales also to influence.
Brexit: It could ultimately be described as, not only make or break for Theresa May, but also for the Pound, Tuesday’s Parliamentary vote on the deal is likely to be as influential as the EU Referendum itself. A vote against has many connotations, one of which includes the possibility of a 2nd EU Referendum, which could come after a vote of no confidence and a new General Election.
U.S – China Trade War: It wouldn’t be a week in the global financial markets if there was not some trade war chatter, good or bad, to influence market risk appetite and the global economic outlook.
On the monetary policy front,
For the EUR, the focus will be on Thursday’s ECB policy decision and the all-important Draghi press conference, with the markets expecting the ECB to bring an end to the asset purchasing program and shift to forward guidance on interest and deposit rates. A fresh set of economic forecasts will also be released that will likely see downward revisions to growth forecasts.
On the Commodities Front,
Crude oil: The monthly OPEC and IEA reports will add some more spice to crude oil’s daily moves, with sentiment towards the global economy expected to continue calling on producers to rebalance in order to avoid a return to supply glut environment. OPEC delivered some much-needed support on Friday to ease some of the sensitivity towards the monthly reports.