Last week, the U.S. dollar remained subdued for most of the time but managed some gains though Charles Evans’ dissent weighed down the greenback. During the week, the Fed raised the interest rate by 25 basis points but decided to leave the dot-plot as it is. Lower inflation and the Republicans’ narrowing majority in the Senate also put pressure on the greenback. However, the dollar recovered over the course of the week in the hopes that the tax bill will be passed and upbeat retail sales data.
In Europe, the Swiss National Bank and the Bank of England decided to leave the interest rates unchanged. The pound remained on the back foot despite the official European Union approval to move to the second phase on Brexit because of worries regarding the government’s stability and a poor trade deal. The European Central Bank also decided to leave the interest rate unchanged but expressed optimism about growth. This neither changed the direction of inflation nor the general tone. The Aussie recovered nicely on the back of a great employment report.
In the upcoming week, the last one before the holidays, the economic data scheduled for release include the U.S. GDP, the UK GDP, and the Canadian GDP. Here is an outlook on some of the key releases:
#1: Reserve Bank of Australia Monetary Policy Meeting Minutes (12/19/2017 Tuesday 00:30 GMT)
The Reserve Bank of Australia releases the monetary policy meeting minutes 11 times in a year two weeks after the announcement of interest rate. It provides a detailed account of the central bank’s Board’s most recent interest rate-setting meeting. It also provides an in-depth insight into the economic situations that influenced the members’ decision.
#2: U.S. Building Permits (12/19/2017 Tuesday 13:30 GMT)
In the U.S., permits issued to privately-owned housing units jumped 7.4 percent to the annualized reading of 1.32 million in the month of October on a seasonally adjusted basis from the preliminary estimate of 5.9 percent increase to 1.30 million. This level is not likely to hold and the figure forecast for November is 1.28 million permits.
#3: U.S. Crude Oil Stocks Change (12/20/2017 Wednesday 15:30 GMT)
In the U.S., the crude oil stocks dropped by 5.117 million barrels during the week that ended on December 8, after the stocks declined by 5.61 million barrels in the prior period. Analysts’ expected the stock to reduce by 3.78 million barrels. Gasoline stocks, on the other hand, increase by 5.664 million barrels, following the 6.78 million increase recorded in the prior week. Analysts’ had expected the gasoline stocks to increase by 2.457 million barrels.
#4: New Zealand GDP (12/20/2017 Wednesday 21:45 GMT)
New Zealand recorded an economic growth of 0.8 percent in the June quarter from the previous quarter. In the prior quarter, the country had reported a GDP growth of 0.6 percent. The figure for the second quarter matched analysts’ expectations. Growth was driven by strong domestic demand and increase in exports. Forecast for the third quarter: 0.6 percent growth.
#5: Bank of Japan Monetary Policy Statement (12/21/2017 Thursday)
Scheduled eight times in a year, the Bank of Japan uses it as a tool for communicating with investors as regards the monetary policy. In addition to giving indications about the outcome of the members’ decision on the purchase of assets, it also provides a commentary as regards the economic situations that impacted their decision. More importantly, the statement gives a projection on economic outlook and clues on future votes.
#6: Bank of Japan Policy Rate (12/21/2017 Thursday)
In the interest rate meeting in October 2017, the Bank of Japan decided to leave the key short-term interest rate steady at -0.1 percent as expected by the analysts. Policymakers also maintained the target for 10-year yield from government bonds at around zero percent. However, they cut down the inflation forecast to 0.8 percent from 1.1 percent for fiscal 2017 as the price-setting stance of wages of firms remained cautious. Forecast for December: -0.01 percent
#7: Bank of Japan Press Conference (12/21/2017 Thursday 06:30 GMT)
The Bank of Japan holds press conferences eight times in a year after the announcement of the policy rate. The central bank uses this as a tool to communicate with the investors as regards the monetary policy. In addition to covering the factors that influenced the most recent decision, it also provides an overall outlook on inflation and economic conditions and clues on future monetary policy decisions.
#8: Canada CPI (12/21/2017 Thursday 13:30 GMT)
Canada’s Consumer Price Index rose by 0.10 percent in October, following an increase of 0.2 percent in the previous month.
#9: Canada Core Retail Sales (12/21/2017 Thursday 13:30 GMT)
Canada’s retail sales rose by 0.1 percent on a month-over-month basis in September after the reading for the previous month was revised downward to 0.1 percent decline. Analysts had expected the retail sales to increase by 0.9 percent. Better sales at gas stations and higher prices contributed to the gain. Core retail sales rose 0.3 percent after falling 0.7 percent in the prior month. Analysts had expected it to increase by 0.9 percent.
#10: U.S. Final GDP (12/21/2017 Thursday 13:30 GMT)
The second estimate showed that the American economy expanded at an annualized rate of 3.3 percent in the third quarter which was better than the preliminary estimate of 3.0 percent growth. The reading also came in higher than analysts’ estimate of 3.2 percent expansion. It is expected that the third estimate will confirm growth rate reported in the second estimate. This is the second consecutive quarter of more than 3.0 percent GDP growth.
#11: #11: U.S. Unemployment Claims (12/21/2017 Thursday 13:30 GMT)
The number of American people filing for jobless benefits dropped 11,000 to 225,000 during the week that ended on December 9, from the unrevised claims of 236,000 for the prior week. The reading for the week came in below analysts’ expectation of 239,000 claims. The initial jobless claims have declined for four weeks in a row. This is the lowest level since the week that ended October 14. In the Virgin Islands and Puerto Rico claims taking procedure are still disrupted. Forecast for next week: 234,000
#12: U.K. Current Account (12/22/2017 Friday 09:30 GMT)
In the U.K., the current account deficit rose to GBP 23.2 billion during the second quarter after the reading for the prior period was revised upward to a deficit of GBP 22.3 billion. The reading for the June quarter came in above analysts’ expectation for a deficit of GBP 16.3 billion. This is the highest deficit since the September quarter of last year. Forecast for the third quarter: GBP 21.3 billion
#13: Canada GDP (12/22/2017 Friday 13:30 GMT)
Canada’s GDP grew 0.2 percent on a month-on-month basis in September, recovering from the 0.1 percent decline in August. The reading for September came in better than analysts’ expectation of 0.1 percent expansion.
#14: U.S. Core Durable Goods Orders (12/22/2017 Friday 13:30 GMT)
The Department of Commerce reported that durable goods orders contracted by 1.2 percent on a month-over-month basis in October, following September’s 1.0 percent increase, as orders for civilian aircrafts fell 18.6 percent and defense aircrafts dropped 11.3 percent. The orders for core durable goods rose by 0.9 percent and are expected to grow at a slower pace of 0.5 percent in November.