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Monday 05-12-2016 Outlook
Posted On 05 Dec 2016
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Welcome to the easyMarkets weekly outlook starting this Monday 5 November. We’ll be looking at the week’s key economic events on the financial calendar covering Monday to Thursday. Be sure to catch up with our Friday morning report that looks back at how the events played out and with a look at Friday’s events.
Event: EU Services PMI
Date: Monday 05 December
Markets affected: EUR/USD
Trending hashtags: #markit, #pmi, #eur
November’s PMI figures will be released on Monday for Spain (08:15 GMT), France (08:50) and Germany (08:55) and for the whole Eurozone (09:00). The Markit figures in October for Spain came in at 54.6, France had 52.6, Germany 54.6 and the Eurozone 54.1 points – all showing good growth. A PMI with a score above 50 is considered expanding. November’s figures released today are expected to stay positive.
Event: RBA Interest Rate Decision
Date: Tuesday 06 December 2016 at 03:30 GMT
Markets affected: AUD/USD
Trending hashtags: #rba, #aud
The Reserve Bank of Australia will be releasing its interest rate decision. The RBA sets the official cash rate target on the first Tuesday of every month except January. Analysts are not expecting any changes to the rate for this month. The view is that this easing cycle still has longer to play out. The consensus is that RBA will not make any moves before Christmas and will wait for further data before considering any rate cut for the first part of 2017.
Event: EU GDP announcement
Date: Tuesday 06 December at 10:00 GMT
Markets affected: EUR/USD
Trending hashtags: #eur, #usd, #eugdp
Tuesday’s GDP for the Eurozone is a revision and expected to confirm the previous figure of 0.3%. According the Eurostat’s flash estimate, seasonally adjusted GDP rose 0.3% in the euro area during the 3rd quarter of 2016. Compared to the same quarter of last year, the GDP increased 1.6%.The impact of the ECB’s quantitative easing programmes will be under the spotlight as the health of the region is confirmed.
Event: Canada Interest Rate Decision
Date: Wednesday 07 December 2016 at 15:00 GMT
Markets affected: CAD/USD
Trending hashtags: #cad
The Bank of Canada has so far kept its benchmark interest rate unchanged at 0.5% even though it reduced its outlook for the economy due to short-term activity in the housing market and soft exports. While most economists are not expecting any changes to the rate, a few have noted that the threat to the North American Free Trade Agreement trade accord might derail Canada’s business spending. Trump’s victory in the US means uncertainty for the NAFTA and discouraged investment and capital spending. The BOC has not reduced interest rates since July 2015, though it did consider it last month before deciding to hold.
Event: ECB Interest Rate Decision
Date: Thursday 08 December 2016 at 12:45 GMT
Markets affected: EUR/USD
Trending hashtags: #ecb, #eur, #usd
So far the ECB has been holding rates steady at 0% (refinancing rate), 0.25% (marginal lending rate) and 0.40% (deposit facility). It has also maintained its purchasing programme at 80 billion EUR per month and plans are to keep it until at least March 2017. With steady but low recovery for the region, and increasing inflation not many changes are expected for December’s report. Effects from the Italian Referendum may not be felt immediately so any changes are more likely to come in the new year.
Event: UK Consumer Inflation Expectations
Date: Friday 09 December 2016 at 0830 GMT
Markets affected: GBP/USD, GBP/EUR
Trending hashtags: #usd, #eur, #gbp
This quarterly survey by the Bank of England assesses the public’s attitude to inflation. The previous rate of 2.2% is expected to slip in December’s results. BOE Governor, Mark Carney has already warned of inflation rises for 2017 due to Brexit pressures. This week the UK Supreme Court has been hearing the Government-Parliament Appeal of the Brexit and though outcomes won’t be known until the following month, the uncertainty may well be playing on the UK consumer’s minds.
https://www.finder.com.au/rba-cash-rate
http://business.financialpost.com/tag/bank-of-canada
https://www.focus-economics.com/country-indicator/eurozone/interest-rate
https://www.ons.gov.uk/economy/inflationandpriceindices
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