December D-Day approaching

Yesterday’s markets

17th November 2015

  • G20 Meetings
  • EUR Final CPI y/y: 0.1%
  • ECB President Draghi Speaks
  • CAD Manufacturing Sales m/m: -1.5%
  • US Empire State Manufacturing Index: -10.7
  • AUD Monetary Policy Meeting Minutes
  • NZD Inflation Expectations q/q: 1.9%

The world’s top two central banks are expected to inject seriously volatile strikes this December, as the ECB and Fed’s diverging policies are forecast to widen even more. With such risks inevitable, attention turns to not when but to how great an effect this will pose to the FX markets. The ECB and Federal Reserve which appear poised respectively to ease and tighten monetary policy by the end of this year. The ECB surprised markets in October by raising suspicion of further stimulus in December and in contrast the US economy in its current buoyant state, delivered an unexpectedly hawkish message, boosting the likelihood of the world’s largest economy raising rates for the first time in seven years.

Meanwhile, the force is strong with Asian toy makers at the moment, helping to give the region a new hope for the struggling exporters in the world’s second largest economy. Shipments to the US of lightsabers, action figures and other Star Wars merchandise is forecast to give American toy importers a 11% boost. Good news not only for Chinese and Vietnamese manufacturers but also for US retailers for the tail end of the year.  

Today’s markets

16th November 2015

  • UK CPI y/y
  • UK PPI Input m/m
  • UK RPI y/y
  • EUR German ZEW Economic Sentiment
  • US CPI m/m
  • US Core CPI m/m
  • US Industrial Production m/m
  • US Mortgage Delinquencies

Inflation data will take centre stage from both the UK and US. UK inflation is under scrutiny after the dovish comments from BoE Gov. Carney at the quarterly inflation report. Inflation is once again expected to be negative which only dampens expectation for a rate hike. Also on the docket is the important German ZEW  numbers.  This is a survey of German institutional investors and analysts and their views on the economy.