Welcome to the easyMarkets weekly outlook starting this Monday 12 December. 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: UK Consumer Price Index (Nov)
Date: Tuesday 13 December 2016 at 09:30 GMT
Markets affected: GBP/USD, EUR/GBP
Trending hashtags: #gbp, #inflation, #uk
UK annual inflation data for October were lower than anticipated, as the increase for the twelve months until October was 0.9% in comparison to September’s 1% reading and also analysts’ expectations for 1.1%. Prices of both raw materials and goods ready for sale surged during October, but in contrast other retail goods such as clothing did not increase as much as October last year. Consumer Price Index (CPI) data for November is expected to show an increase of 1.1%.
Event: US Retail Sales (Nov)
Date: Wednesday 14 December 2016 at 13:30 GMT
Markets affected: EUR/USD, AUD/USD, USD/CAD
Trending hashtags: #usd, #retailsales
US Retail sales were higher than anticipated, rising by 0.8% on building materials and car sales. Moreover, September’s reading was revised upwards to 1% and this is yet another indication of the economic strength and also evidence for investors who anticipate an interest rate increase by the Fed. November Retail Sales are anticipated to surge by 3%.
Event: Fed Interest Rate Decision
Date: Wednesday 14 December 2016 at 19:00 GMT
Markets affected: EUR/USD,
Trending hashtags: #interestrate, #usd, #federalreserve
September’s economic projections report revealed Fed’s forecast for GDP to grow by 1.9% in 2016, while it is also expected that the unemployment rate to be 4.7% – 4.9% for 2016 and higher than expectations for 4.6% – 4.8% shown in the previous report. During the Federal Open Market Committee (FOMC) meeting in November it was resolved to leave interest rates unchanged. However, they gave strong implications for a possible rate hike during the 2016 final meeting. Fed Chairwoman Janet Yellen said that the election of Donald Trump did not alter the growth forecasts and so interest rates could increase “relatively soon”. The Fed is expected to increase interest rates to 0.75%.
Event: Australian Unemployment Rate (Nov)
Date: Thursday 15 December 2016 at 00:30 GMT
Markets affected: AUD/USD
Trending hashtags: #aud, #unemployment
Australia’s labour market in October increased by 10,000 new positions however the corresponding unemployment rate remained at 5.6% due to the reduction of the workforce participation to 64%. Analysts were expecting for the new positions number to be closer to 20,000 instead. The new positions increase was a result of an increase in full-time positions and at the same time the decrease of part-time positions. Now expectations for November are for more than 17,000 new positions while the unemployment rate is forecasted to remain once more to 5.6%.
Event: UK Interest Rate Decision (Nov)
Date: Thursday 15 December 2016 at 12:00 GMT
Markets affected: GBP/USD
Trending hashtags: #gbp, #interestrate
Despite expectations, the Bank of England (BOE) refrained from reducing interest rates in November, however its forecasts for inflation during 2017 were revised upwards following the pound’s depreciation. Growth for next year was forecasted upwards to 1.4% compared to 0.8% reported in August. The details of Brexit are yet unknown but there is a real possibility that UK’s access to the EU markets might soon not be as free as it is now and that could weigh on its economic growth. Inflation levels are also expected to rise as a result of the pound’s fall against the U.S. dollar.