Week Ahead


Next week important releases include US inflation, retail sales, industrial output and flash Markit PMIs; UK unemployment, wage growth, trade balance and monthly GDP; Eurozone flash Markit PMIs; Germany investor morale and trade balance; Turkey Q3 GDP growth; China industrial production, retail sales and fixed asset investment; Japan business survey, final Q3 GDP growth and machinery orders; Australia business and consumer morale; India inflation and industrial output; and interest rate decisions from the ECB, Brazil, Switzerland, Turkey and Norway.

The highly anticipated US consumer price index report for November will probably show a slowdown in inflation to 2.4 percent from October's 2.5 percent, while the core inflation is set to accelerate to 2.2 percent from 2.1 percent. Figures are likely to remain above the Fed's 2 percent target and to support the FOMC's decision to reaffirm its monetary tightening stance for this year. Meanwhile the country’s retail sales and industrial production figures for November will also be watched. Other important data include: flash Markit PMIs; producer and foreign trade prices; JOLTs job openings; and business inventories.

Other important releases for America include Canada new housing price index, housing starts and building permits; and Brazil retail sales. Also, the Central Bank of Brazil is likely to leave its monetary policy rate unchanged at 6.5 percent amid reduced political uncertainty and slowing inflation.

In the UK the parliament will vote on Prime Minister Theresa May’s Brexit agreement, which needs the backing of at least 320 MPs to pass. The outcome is uncertain, as many say she will fail to gather enough support. Regarding the economic calendar, unemployment rate is set to remain steady at 4.1 percent, after rising unexpectedly in the prior period, and wage growth is likely to advance to an annual 3 percent, matching third quarter's three-year high. The ONS will also publish monthly GDP, industrial production, construction output and trade balance.

Elsewhere in Europe, the ECB will decide on monetary policy, with markets anticipating no changes in borrowing costs. It will be the last meeting of the year and investors will be waiting to see if Mario Draghi strikes a more cautious tone amid a slowdown in global economic growth. Still, he is unlikely to signal any change in the ECB’s policy path. In addition, the Eurozone flash Markit PMIs are expected to show a slight improvement in business conditions across the service sector while manufacturing growth is seen to slow further following the previous month's 26-month low. Market players will also focus on the Eurozone industrial output; Germany ZEW economic sentiment, trade balance and final inflation; and Turkey Q3 GDP growth. The Swiss National Bank, the Norges Bank and the Central Bank of Turkey will also be deciding on rates next week, but no changes are expected.

China will be publishing November’s industrial production, retail sales, fixed asset investment and monetary indicators. Output is projected to hold steady at 5.9 percent and retail trade growth is likely to pick up to 9 percent. Meanwhile, the Bank of Japan's quarterly tankan business sentiment survey is expected to show a further deterioration in big manufacturers' morale amid concerns over global growth and US-China tariff tensions. Traders are also eyeing the publication of Japan's final estimate of Q3 GDP growth, current account, machinery orders and flash Nikkei Manufacturing PMI. Australia will publish NAB Business Confidence, Westpac Consumer Confidence and Q3 home prices. Meanwhile in India, November’s inflation rate, alongside wholesale prices, industrial production and balance of trade will be in the spotlight. Market forecasts point to a slowdown in consumer price growth to 2.8 percent in November from October's year-low of 3.31 percent.

Week Ahead


Joana Ferreira | joana.ferreira@tradingeconomics.com
12/7/2018 7:10:50 PM