The Federal Reserve’s decision to maintain or reduce the pace of asset purchases is most likely to prove the highlight of the next few days. The consensus is that the Fed will wait for the New Year before it begins tapering, but recently strong US economic statistics might have tipped the balance in favor of taking action earlier than most expect.
Any decision to taper could prove dollar-positive, as the rate of pumping extra dollar liquidity to the markets will be curtailed. However, if tapering does indeed occur, the Fed will also be pressed to give some added reassurance regarding its forward guidance, i.e. that it will not raise interest rates from current levels anytime soon.
On Tuesday, US inflation for November will be the main economic release, with the headline rate expected to come in at 1.7% and the core rate at 1.3%. In Europe, UK and Eurozone inflation numbers for November will also be expected, as well as the German ZEW investor confidence survey. Inflation is currently not a serious consideration for monetary authorities, as with the exception of the UK, it is mostly well below the thresholds that central banks would begin to worry about.
On Wednesday, during the Asian session Chinese house prices and Japanese trade balance will be released. Later on, UK employment data and Bank of England minutes will be released, together with the German IFO business confidence survey. Later on of course the headlights will be on the Fed announcement.
Thursday will feature the monetary policy decision by the Bank of Japan. UK retail sales for November will be released during the European session, while later on in the United States, there will be weekly jobless claims, existing home sales and Philly Fed business survey index.
Friday will round up a busy week, but for a number of market participants the close could mark the end of their business year, as it could be effectively the last full working day of 2013 because of the Christmas and New Year holidays. Not however before the final reading of third quarter US economic growth and the Personal Consumption expenditure index for the third quarter. With respect to Europe, Eurozone consumer confidence, German GfK consumer sentiment and French business climate will be announced. For the UK, there will be current account figures for the third quarter, public finances for November and the final reading of 3rd quarter GDP growth.
Therefore this busy week will be most crucial in determining the final performance figures for 2013 so it will be watched very closely.
The Federal Reserve’s decision to maintain or reduce the pace of asset purchases is most likely to prove the highlight of the next few days. The consensus is that the Fed will wait for the New Year before it begins tapering, but recently strong US economic statistics might have tipped the balance in favor of taking action earlier than most expect.
Any decision to taper could prove dollar-positive, as the rate of pumping extra dollar liquidity to the markets will be curtailed. However, if tapering does indeed occur, the Fed will also be pressed to give some added reassurance regarding its forward guidance, i.e. that it will not raise interest rates from current levels anytime soon.
On Tuesday, US inflation for November will be the main economic release, with the headline rate expected to come in at 1.7% and the core rate at 1.3%. In Europe, UK and Eurozone inflation numbers for November will also be expected, as well as the German ZEW investor confidence survey. Inflation is currently not a serious consideration for monetary authorities, as with the exception of the UK, it is mostly well below the thresholds that central banks would begin to worry about.
On Wednesday, during the Asian session Chinese house prices and Japanese trade balance will be released. Later on, UK employment data and Bank of England minutes will be released, together with the German IFO business confidence survey. Later on of course the headlights will be on the Fed announcement.
Thursday will feature the monetary policy decision by the Bank of Japan. UK retail sales for November will be released during the European session, while later on in the United States, there will be weekly jobless claims, existing home sales and Philly Fed business survey index.
Friday will round up a busy week, but for a number of market participants the close could mark the end of their business year, as it could be effectively the last full working day of 2013 because of the Christmas and New Year holidays. Not however before the final reading of third quarter US economic growth and the Personal Consumption expenditure index for the third quarter. With respect to Europe, Eurozone consumer confidence, German GfK consumer sentiment and French business climate will be announced. For the UK, there will be current account figures for the third quarter, public finances for November and the final reading of 3rd quarter GDP growth.
Therefore this busy week will be most crucial in determining the final performance figures for 2013 so it will be watched very closely.
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