The main event of the month – the FOMC meeting – will be the focus of the week and is likely to move markets regardless of its outcome. The outcome will only play in determining market volatility and direction. A modest and currently anticipated rate hike of 0.25% is likely to bring up USD and down commodities and stocks. The tone of the statement and press conference will also determine how market will react. The Fed will also issue an update on its members’ economic outlook and dot plot that will show the trajectory of the Fed’s cash rate in 2016. Other reports and events that will take the back seat to the Fed’s upcoming meeting include: U.S. CPI, German ZEW economic sentiment, BOJ’s rate decision, U.S. industrial production, Canada’s CPI, GB’s CPI, Philly Fed index, EU CPI, and U.S. housing starts. So let’s preview the economic calendar for the week of December 14th to 18th:
(All times GMT):
Monday, December 14th
11:00 – ECB President Draghi Speaks: He’s expected to give a talk at Prometeia’s conference, in Italy;
00:30 – Minutes of Reserve Bank of Australia’s Monetary Policy Meeting: The Reserve Bank of Australia didn’t change its cash rate, which is still set at 2% as of the December meeting; this report may still move the Aussie dollar and perhaps indicate what’s next vis-à-vis RBA’s policy;
Tuesday, December 15th
09:30 – GB CPI: According to the last monthly update, the CPI edged down to -0.1% in October. The current projections are for the inflation to inch up in November to 0.1%;
10:00 – German ZEW economic sentiment: This report will refer to the ZEW indicator of economic sentiment for Germany for November. In October, the ZEW indicator for Germany rose to 10.4 points; if Germany’s economic sentiment keeps rising, this may imply an increase in the growth of its economy; the current estimates are for a rise to 15.2;
13:30 – Canada Manufacturing Sales: In the last report regarding October 2015, manufacturing sales declined by 1.5%;
13:30 – U.S Core Consumer Price Index: This monthly report pertain to the developments in the core consumer price index for November 2015. According to the U.S Bureau of Labor statistics, back in October, the CPI rose by 0.2%; the core CPI inched up again by 0.2%; this time, the CPI is expected to remain flat and core CPI to rise by 0.2%;
16:45 – BOC Gov Poloz Speaks: He is expected to hold a press conference about the Financial System Review, in Ottawa;
Wednesday, December 16th
09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the last October report, France’s PMI inched up to 50.8 i.e. the manufacturing conditions are growing. And Germany’s PMI rose to 52.6 – the industry is expanding at a faster pace; currently, the market estimates Germany’s PMI will slightly rise to 52.7;
09:30 – Great Britain Average Earnings Index 3m/y: This report shows the developments in the price businesses and the government pays for labor force; in the recent report, this index remained at 3%; current market estimates are for the index to fall to 2.5%;
09:30 – Great Britain Claimant Count Change: As of the recent monthly update, the number of unemployed in GB rose by 3.3K; the rate of unemployment edged down to 5.3% and is expected to remain unchanged in the upcoming report;
10:00 – EU CPI (final): Based on the latest flash estimate, the CPI inched up by 0.1% in November; the CPI is estimated to rise again by 0.1%;
13:30 – U.S. Building Permits: In the last report, during October, building permits rose to 1,150 thousand houses (the latest U.S building permits update); current estimates are for a modest gain to 1,160K;
13:30 – U.S. Housing Starts: The U.S Census Bureau will publish its U.S. housing starts monthly update for November 2015; in the recent report, housing starts declined to 1,060 thousand houses;
14:15 – U.S. Industrial Production: This report will show the changes in the U.S industrial production during November; as of October, industrial production fell by 0.2%;
15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will release its weekly report on the U.S oil and petroleum stockpiles for the week ending on December 12th;
19:30 – FOMC Meeting and Press Conference: This will be the main event of the week and the month. The market estimates the FOMC will raise rates for the first time in close to a decade. But this won’t be the only focus. The market will examine the wording of the statement, and how the Fed will craft its message about the normalization process; Chair Yellen will hold a press conference. Finally, the Fed will also issue an update to its economic outlook and dot plot that will provide additional insight regarding the rate hike pace moving forwards. If the Fed does a 180 change and doesn’t raise rates, it will be a bigger surprise and could drag down the USD and pull up gold and silver;
Thursday, December 17th
09:00 – German Ifo Business Climate Index: The index comprises of the difference (on a monthly basis) in the manufacturers, builders, wholesalers, and retailers in Germany as of December. In the November report, the business climate index edged up to 109; currently, the market expects a modest slightly rise to 109.2;
09:30 – Great Britain Retail Sales: According to last month’s report, retail sales in Great Britain declined by 0.6%;
13:30 – U.S. Jobless Claims Weekly Report: This weekly report will refer to the changes in the initial jobless claims for the week ending on December 12th; in the recent report, jobless claims rose to 282K; the expectations are for this number to slightly decline to 271K;
15:00 – Philly Fed Manufacturing Index: This monthly survey estimates the growth of the US manufacturing sectors. In the latest survey, the growth rate dropped from -4.5 in October to +1.9 in November. This time, the index is expected to slightly rise to 2.1 (the recent Philly Fed review);
15:30 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the latest changes in natural gas production, storage, consumption and rates as of December 12th;
Tentative – Japan’s rate decision, press conference and updated outlook: In the upcoming Japanese monetary policy meeting, BOJ members will review the bank’s monetary policy and whether it’s time to ramp up the bank’s asset purchase program. Japan’s economy isn’t doing well, but the current estimates are for the BOJ to keep its policy unchanged;
Friday, December 18th
13:30 – Canada’s core CPI: According to the latest update, the CPI edged up again by 0.3%, M-o-M;
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