14 – 20 Dec:
Next week’s highlight is obviously the FOMC meeting on Wednesday. We expect a 25bp rate hike and a dovish message. PMI data out of the Euro area will shed light on the manufacturing sector, while HICP inflation should be confirmed at 0.1% y/y. The BoJ, the Riksbank and Norges Bank will also announce their rate decisions. Next week also brings CPI prints from the US and the UK.
Next week’s highlight is obviously the FOMC meeting (Wed). A rate hike seems almost certain, but the key uncertainty is related to the tone of the FOMC statement, the committee’s new projections for the fed funds rate and Fed Chair Yellen’s forward guidance. We expect a 25bp rate hike and a dovish message and a more dovish dot plot. Headline CPI inflation (Tue) is expected to take another step upwards in November. The Philly Fed (Thu) and Empire State (Tue) manufacturing surveys as well as housing starts (Wed) will also get some attention.
We expect little change in the flash PMI numbers (Wed) and Ifo index (Thu). At current levels the composite PMI suggests GDP growth of 0.4% q/q in the Euro area. Inflation should be confirmed at 0.1% y/y (Wed). On Thursday the ECB will publish the Economic Bulletin.
UK CPI numbers will be released Tuesday. Our forecast is that CPI remain around zero in November.
Bank of Japan (BoJ) to announce new rate decission on Friday. BoJ is expected to stay on the sidelines and leave its last monetary policy meeting this year with no change.
The Riksbank announces their rate decission on Tuesday. The looming Fed-hike and the under-delivery from ECB, suggest that the Riksbank will stay on hold next week.
Norges Bank will present its rate decision and a new monetary policy report Thursday. We forecast rates on hold.
The Banxico committee is set for a rate lift-off when it meets the day after the FOMC meeting on Thursday next week – its first rate hike in 7 years. Read more here.
Shanghai Cooperation Organization. Today, President Xi Jinping hosts the meeting in Zhengzhou of the SCO, which includes China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. The group seeks to improve economic and security ties between China and the Eurasian nations.
World Internet Conference. On Wednesday, President Xi attends the event amid speculation he will lift a ban on certain international media websites. Through Dec. 18.
Russia-China. Premier Li Keqiang hosts his Russian counterpart Dmitry Medvedev on Thursday in Beijing.
Yirendai IPO. Online consumer finance company Yirendai set a range of $9 to $11 per share for the 7.5 million American Depository Receipts it plans to price after market Thursday. The company is telling potential investors that it is positioned to capitalize on rising demand for internet finance as traditional lenders lag technologically and focus on enterprise lending, according to materials published on retailroadshow.com.
Property Prices. On Friday, property prices will update for November. Housing prices and sales, especially in first-tier cities, have been boosted by the government’s substantial policy support. Still, the housing sector in smaller cities has lagged due to abundant supply, weighing on overall real estate investment.
MNI Business Indicator. Market News International will release their business survey for December. While the indicator is volatile, the overall trend in recent months has been broadly flat and at a low level, in line with the weak economy.