mask Week Ahead | Central Banks in Focus

11/ 12/ 2017

Week Ahead | Central Banks in Focus

11th December 2017 - 15th December 2017

Monday

It will be quiet start to the week with no reports of top tier data. 

Tuesday

  • GBP Producer Price Index, Consumer Price Index
  • USD Monthly Budget Statement

On Tuesday, another day of low tier data which begins with the UK Inflation, headline CPI reached the top of the range in both September and October, at 3% y/y. This is a result of the weaker pound, which in itself is a result of Brexit. The Bank of England forecasts a slide in inflation moving forward, and this will be the first test. The outcome also feeds into the rate decision later in the week. Expectations still remain high at 3%. From US, Monthly Budget Statement will be released

Wednesday

  • EUR Harmonized Index of Consumer Prices, Industrial Production
  • GBP ILO Unemployment Rate
  • US Consumer Price Index, USD Economic Projection, FED Interest Rate Decision

On Wednesday, day begins with hours before the Fed decision, we will get to know if inflation remains subdued and how “transitory” it really is. The report for October showed a small rise in core inflation, from 1.7% to 1.8% y/y, prompting the same tick up in the Fed favourite Core PCE, from 1.3% to 1.4%. Another rise in the report for November will make a more convincing case for a rate hike, but surprises are not uncommon.

Thursday

  • GBP Bank of England Interest Rate Decision, Asset Purchase Facility, Monetary Policy Summary, Bank of England MPC Vote
  • EUR ECB Interest Rate Decision, Monetary Policy Statement & Press Conference
  • USD Initial Jobless Claims

Aside from Wednesday’s Fed decision, the week ahead will also feature decisions from other major central banks, including the European Central Bank, Bank of England, and Swiss National Bank, all on Thursday. None of these three central banks is expected to make any interest rate changes at that time, but their policy statements, as always, will likely have a significant impact on their respective currencies. Other than the parade of central banks issuing their statements and decisions, the busy week ahead will also be highlighted by key economic data releases, including inflation data from the UK (CPI) and US (CPI and PPI), retail sales numbers from the US and UK, and jobs data from the UK.

Friday

  • EUR Wholesale Price Index
  • USD Industrial Production

On Friday, Wholesale Price Index report from Germany, growing number in wholesales indicates increases in retail trade and consumption, that is seen as positive or bullish for the EUR, while a declining number indicates the weakened retail sectors. From US, Industrial Production will be released by the Board of Governors of the Federal Reserve that shows the volume of production of US industries such as factories and manufacturing.