Markets remain weighed by the uncertainty of the impact from the Omicron variant and this is likely to drag into next week as clear data will not be available until mid–December. Chair Powell continued the FED’s shift to the Hawkish side as “transitory” inflation was finally “retried”, a faster taper was suggested and therefore an earlier start to the interest rate hike cycle. A strong set of US data this week was topped by the unemployment rate diving to 4.2% NFP was only 210,000 550,000 new jobs . Next week the December central bank merry go-round comes into focus starting with the RBA & BOC , along with Chinese Trade data, EZ & Japanese GDP numbers.
Monday – 06 December 2021
German Factory Orders (EUR, GMT 07:00) – German factory orders have been extremely volatile recently 3.4% in September, -7.7% (revised lower to -8.8%) in October and +1.3% rebound in November. As new restrictions loom for the unvaccinated, German factory orders are likely to have rebounded again and turned negative.
Tuesday – 07 December 2021
RBA Rate Statement & Interest Rate Decision (AUD, GMT 03:30) ZEW Economic Sentiment & EZ Employment & Revised GDP (EUR, GMT 10:00) – Key set of data for EZ – ZEW is likely to show a gradual rebound from the October low at 21.0 and November reading at 25.9, however well below the early summer highs of 84.0 in May. The Quarterly Employment is likely to remain steady at 0.9% from September’s 0.7% and the decline of -0.3% in June. Finally the revised GDP could rise to 2.2% from 2.0% with the y/y number rising to 13.6% from 3.7% in 2020.
Wednesday – 08 December 2021
BOC Rate Statement & Press Conference – (CAD, GMT 15:00 & 15:30) JOLTS Job Openings (USD, GMT 15:00) – This Janet Yellen invention continues to receive more prominence as the US job market continues to show signs of significant tightening, with many workers not returning to jobs, retiring early on the back of buoyant stock markets and record house prices and many not returning even after the Government cheques stopped and the schools re-opened. A hefty 10.93 million reading in September has only declined slightly since, with the number expected to be 10.45 million today.
Thursday – 09 December 2021
Consumer Price Inflation (CNY, GMT 01:30) – China has not been immune to rising prices and uncertainty. With the continuing clouds over many real estate developers (Evergrande & Kaisa the two highest profile) and the tech crack down by the authorities also continuing (Didi announcing it will delist from the NYSE and move to the Hang Seng) Inflation is set to tick higher; CPI up to 1.6% from 1.5% and PPI 14.0% from 13.5%.Weekly Claims (USD, GMT 13:30) Following last weeks 52-year low reading at only 222k and the previous week being revised lower again to 194K this weeks number is eagerly awaited. Seasonality factors apart, the evidence of the tight US jobs market continues, a more normal economic cycle average is 250-260K.
Friday – 10 December 2021
German Final CPI (EUR, GMT 07:00) – Expectations are for HICP to remain steady y/y at 6%. with the m/m number turning up to 0.0% from -0.2% in November. Industrial Production, Manufacturing Production and GDP (GBP, GMT 07:00) – A plethora of data from the UK should show a continued stuttering recovery. IP is expected to turn up from -0.4% last time but remain in decline, MP should be more robust at 3.1% y/y from 2.8% last time. And m/m GDP is expected to have risen to 0.7% from 0.6% in November.US Core CPI (USD, GMT 15:30) – This key data point is expected at 0.7% from 0.6% last month and the headline number 1.1% from 0.9% last time. The FED’s preferred measure of inflation remains the PCE Price Index, but with “transitory” now not part of their mantra the depth and extent of higher prices remains of key interest.
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Stuart Cowell
Head Market Analyst
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