Forex news – A week for reflection and US retail sales
December 9, 2013 3:55 pm
The week ahead will be a relatively quiet affair compared to the headline-grabbing ECB meeting and nonfarm payrolls of the previous week. It will be a very good opportunity for traders and investors to assess and digest recent data and the overall situation concerning economies and central bank moves.
The main question hanging in the air of course will be whether the Federal Reserve decides to surprise markets with a reduction in asset purchases – the so-called tapering – during its December 17 and 18 meeting. The consensus view is that the Fed will refrain from action to await more data, but a sizeable minority of economists believes that the tapering will start.
The basic argument for those that insist that tapering now is a good idea is that the US economy has shown enough recovery that extraordinary rescue measures should stop. Indeed channeling indefinitely more than 0.5% of GDP every month in terms of extra liquidity, can lead to unintended consequences down the road.
Those in favor of delaying tapering say that rushing to taper can damage the fragile recovery, particularly in view of the political uncertainty in Washington. The Fed should at least wait until there is a deal about the budget and the debt limit, goes the same argument.
Which of these arguments finally wins will only become known on Wednesday, December 18. Fed speakers before that date could also give important clues.
In terms of other data, the National Australia Bank business sentiment survey on Tuesday could move the Australian dollar. Inventories and sales data out of the United States are also due for release on the same day. Industrial output and trade data for the UK will also be watched. Chinese retail sales, Italian and French industrial output, as well as Japanese consumer and business confidence will also be released during a busy day.
Wednesday will be more quiet, as the main news will concern Japanese machinery orders as well as final German November inflation data.
Thursday will feature Australia’s employment report as well as the highlight of the week, November retail sales from the United States. As the retail sales figures will include sales after the key thanksgiving holiday, they will take added significance. Overall the US consumer has not been doing badly, although it appears that high-income consumers – with their morale perhaps boosted by the stock market’s new highs – are doing much better than lower-income consumers. Industrial production for the Eurozone during October will also be announced on Thursday.
Friday will feature producer prices from the US and Germany as well as Japanese industrial production and capacity utilization.
By the end of the week, there will basically remain only one full working week for 2013 (December 16-20) as most investors and traders will be gradually closing their positions and winding down ahead of the Christmas holidays.
The week ahead will be a relatively quiet affair compared to the headline-grabbing ECB meeting and nonfarm payrolls of the previous week. It will be a very good opportunity for traders and investors to assess and digest recent data and the overall situation concerning economies and central bank moves.
The main question hanging in the air of course will be whether the Federal Reserve decides to surprise markets with a reduction in asset purchases – the so-called tapering – during its December 17 and 18 meeting. The consensus view is that the Fed will refrain from action to await more data, but a sizeable minority of economists believes that the tapering will start.
The basic argument for those that insist that tapering now is a good idea is that the US economy has shown enough recovery that extraordinary rescue measures should stop. Indeed channeling indefinitely more than 0.5% of GDP every month in terms of extra liquidity, can lead to unintended consequences down the road.
Those in favor of delaying tapering say that rushing to taper can damage the fragile recovery, particularly in view of the political uncertainty in Washington. The Fed should at least wait until there is a deal about the budget and the debt limit, goes the same argument.
Which of these arguments finally wins will only become known on Wednesday, December 18. Fed speakers before that date could also give important clues.
In terms of other data, the National Australia Bank business sentiment survey on Tuesday could move the Australian dollar. Inventories and sales data out of the United States are also due for release on the same day. Industrial output and trade data for the UK will also be watched. Chinese retail sales, Italian and French industrial output, as well as Japanese consumer and business confidence will also be released during a busy day.
Wednesday will be more quiet, as the main news will concern Japanese machinery orders as well as final German November inflation data.
Thursday will feature Australia’s employment report as well as the highlight of the week, November retail sales from the United States. As the retail sales figures will include sales after the key thanksgiving holiday, they will take added significance. Overall the US consumer has not been doing badly, although it appears that high-income consumers – with their morale perhaps boosted by the stock market’s new highs – are doing much better than lower-income consumers. Industrial production for the Eurozone during October will also be announced on Thursday.
Friday will feature producer prices from the US and Germany as well as Japanese industrial production and capacity utilization.
By the end of the week, there will basically remain only one full working week for 2013 (December 16-20) as most investors and traders will be gradually closing their positions and winding down ahead of the Christmas holidays.
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