Following the UK Parliamentary vote on Brexit this week, BOE’s MPC rate vote are scheduled next week. The Fed’s Monetary Policy Meeting stands out as the event of the week.
Monday – 17 December 2018
- Inflation Rate (EUR, GMT 10:00) – Core CPI inflation is expected to have stood unchanged at 1%.
Tuesday – 18 December 2018
- RBA Meeting’s Minutes (AUD, GMT 00:30) – The RBA minutes provides a detailed assessment of the bank’s most recent policy-setting meeting, containing in-depth insights into the economic conditions that influenced the rate decision. They are usually a cause for FX turbulence.
- German IFO (EUR, GMT 09:00) – The German Business Sentiment Index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. December’s numbers are expected to show a slight decline in business climate, at 101.7 from 102 last month.
Wednesday – 19 December 2018
- Consumer Price Index (CAD, GMT 13:30) – The Canadian CPI is expected to slip to 0.1% following the 0.3% jump in October. The core price should fall to 2.2% from 2.4% in October.
Event of the Week: Fed Interest Rate Decision (USD, GMT 19:00)
FOMC expected to announce a 25 bp increase in the funds rate band, bringing the 2018 total to four, as the FOMC’s dots foreshadowed. Fed may downgrade dots to 2 tightenings in 2019. The big question is: where does the Fed go from here? A more uncertain view is starting to filter in from January with the survey medians continuing to flag a 25 bp March hike (after January and February pause), but several forecasters are expecting the FOMC to pause in Q1.
Thursday – 20 December 2018
- Interest Rate Decision (GBP, GMT 12:00) – BoE should remain on hold now until after the Brexit D-Day on 29th March 2019, pencilling in another 25 bp hike in May 2019 on the proviso that Brexit goes smoothly and the economy continues to expand and wages continue to increase. Thus, consensus forecasts suggest no change in the policy rate in this meeting and an unchanged 9-0 MPC voting.
Friday – 21 December 2018
- US Gross Domestic Product (USD, GMT 13:30) – The economy’s most important figure, Q3 GDP growth rate of 3.5% in the third estimate, are expected unchanged from the second reading, versus growth rates of 4.2% in Q2 and 2.2% in Q1.
- Personal Consumption Expenditure Prices (USD, GMT 13:30) – The Fed’s favourite inflation Index is expected flat for November with a 0.2% increase for the core, which would match the respective November CPI headline and core gains.
- Durable Goods (USD, GMT 13:30) – Durable Goods is the leading indicator of production in the US. November Durable Goods orders are expected to have grown by 1.4% in November, following a 4.4% decline in October.
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