Weekly Outlook: Dec 20 — Dec 24: PBoC rate, RBA and BoJ Minutes, UK, US and CAN GDP Figures

PBoC came out with a surprise cut. The RBA and the BoJ will deliver their minutes from the recent meetings. Britain, US and Canada will release their GDP figures. Also, UK and Canada retail sales are on the lookout, together with the US initial and continuing jobless claims.

Monday will be a quiet day in terms of economic data releases. Only one piece of data, which is worthwhile mentioning and that is the People’s Bank of China loan prime rate. The number had already been released. Initially, there was no forecast available, however, the figure showed up as a surprise to everyone, below the previous +3.85%, at +3.80%. This has been done by the Chinese side to help support the slowing economy. Last time the rate experienced a cut was back in April 2020, when it was lowered from +4.05% to +3.85%.

Tuesday will be a bit more exciting day in regards to the economic data events. Australia will kick it off with the RBA delivering the minutes from the meeting held earlier in December. During that meeting, the Bank decided to maintain the cash rate target at 10 basis points and to continue purchasing government securities at the rate of $4bln a week until at least mid-February 2022. Australian employment looks strong and job advertisements are at their highest. Although inflation is high, it remains at maintainable levels.

Another set of economic data for Tuesday, which will be monitored carefully, are the UK’s core and headline retail sales figures for the month of November on a MoM and YoY basis. So far, the expectation for the headline MoM reading is to see a slight improvement, going from +0.8% to +1.0%. However, the core MoM number is believed to have dropped from +1.6% to +0.8%. The core YoY figure is also believed to have fallen strongly, from -1.9% to -3.1%. If those number show up below their initial forecasts, we might see a slight negative effect on the British pound.

The same day, Canada will also release its MoM core and headline retail sales, but only for October. Currently, both numbers are expected to have improved quite significantly. The headline one is believed to have risen from -0.6% to +1.0% and the core reading is forecasted to have improved from -0.2% to +1.6%.

On Wednesday, during the early hours of the Asian morning, we will get the Bank of Japan minutes from their last monetary policy meeting, which was held last week. During that gathering, the Monetary Policy Committee of the BoJ kept their short-term interest rate target at -0.1%. That said, the Bank reduced its corporate bond and commercial paper buying.

During the European morning, Britain will release its third-quarter final GDP figures. Currently, the expectation is for the numbers to stay the same as previous. The QoQ one is forecasted to show up at +1.3% and the YoY number is expected at +6.6%. If the actual figures show up the same as previous, we do not expect much movement in the British pound. However, if the readings beat their forecasts, GBP might strengthen somewhat against some of its major counterparts.

The US will also deliver its final QoQ GDP number for the third quarter, as the UK. And in a similar fashion, the current expectation is for the reading to stay the same, at +2.1%. The US GDP QoQ price index for Q3 is also expected to stay at the same level of +5.9%. In addition to that, investors will be on the lookout for the US CB consumer confidence figure for the month of December. Currently, analysts are forecasting the number to show up at 110.2, which is slightly above the previous reading of 109.5.

Thursday will be a relatively light day on the economic calendar too. There are only a few pieces of data, which are worth keeping an eye on. From the US we will receive the initial and continuing jobless claims for the past week. Currently, there are no major surprizes expected, as the initial ones are believed to decline only by 1K, going to 205K. And the continuing ones are forecasted to go down from 1845K to 1820K. The US will also deliver its core durable goods orders on a MoM basis for the month of November. The expectation is for the figure to go from +0.5% to +0.6%. If so, that would be a third month in a row, when the numbers manage to beat their previous reading. In addition to all that data, the US will provide us with the new home sales figure for November, which is believed to improve slightly from 745K to 770K.

The only other piece of data that is worth mentioning is the one from Canada. The country will provide us with its MoM GDP number for October. The expectation there is for the reading to go higher quite substantially, from +0.1% to +0.8%.

And finally on Friday, it’s Christmas Eve and many Christian countries will have their markets closed. The only important dataset that we will receive will be from Japan. The country will deliver its inflation figures for the month of November. The non-seasonally adjusted MoM CPI figure has no forecast currently. The same as the national YoY CPI indicator. However, the national core YoY CPI is believed to have gone from +0.1% to +0.4%.

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