There are a number of economic releases on the calendar next week but it’s almost entirely made up of tier two and three data. That includes final PMIs, revised GDP and retail sales.
The most notable events for the EU over the next week are speeches by ECB policymakers ahead of the last meeting of the year a week later – including President Lagarde on Monday and Thursday – and the final negotiations on the Russian oil price cap as part of a package of sanctions due to come into force on Monday.
UK
Compared with the soap opera of the last few months, next week is looking pretty bland from a UK perspective. A couple of tier two and three releases are notable including the final services PMI, BRC retail sales monitor and consumer inflation expectations. I’m not convinced any will be particularly impactful, barring a truly shocking number.
Russia
The most notable economic release next week is the CPI on Friday which is seen moderating further to 12% from 12.6% in October, potentially allowing for further easing from the CBR a week later.
Politics appears to be dominating the South African markets at the moment as efforts to impeach President Cyril Ramaphosa go into the weekend. The rand has seemingly been very sensitive to developments this week, with the prospect of a resignation appearing to trigger sharp sell-off’s in the currency and the country’s bonds. Under the circumstances, that could bring weekend risk for South African assets depending on how events progress over the coming days.
On the data front, next week brings GDP on Tuesday and manufacturing production on Thursday.
Turkey
Ordinarily, especially these days, inflation releases are widely followed but that is less the case for a country and central bank that has such little interest in it. Official inflation is expected to ease slightly, but only to 84.65% from 85.51% in October, hardly something to celebrate. The central bank has indicated that its easing cycle will now pause at 9% so perhaps another reason to disregard the inflation data.
Switzerland
A quieter week after one of repeated disappointment on the economic data front. Whether that will be enough to push the SNB into a slower pace of tightening isn’t clear, although it has repeatedly stressed the threat of inflation and need to control it. The meeting on 15 December remains this months highlight while next week has only unemployment on Wednesday to offer.
The PBOC announced on 25 November its decision to cut the reserve requirement ratio for banks by 25 basis points, lowering the weighted average ratio for financial institutions to 7.8% and releasing about 500 billion yuan in long-term liquidity to prop up the faltering economy.
In response to the various property crises that have emerged in the real estate sector over the past year or so, i.e. debt defaults by real estate companies, mortgage suspensions leading to unfinished buildings, and real estate-related non-performing loan crises, the Chinese government has issued a new 16-point plan.
Focus next week will be on the Caixin services PMI, trade data, CPI release and the protests. China’s strict zero-Covid measures are hammering growth and the public is clearly becoming increasingly frustrated. It will be a fine balance between managing protests and easing Covid-zero measures to support growth in a country not used to the former.
The RBI could potentially bring its tightening cycle to a close next Wednesday with a final 35 basis point hike, taking the repo rate to 6.25%. While the outlook remains cloudy given the global economic outlook, there is some reason to be optimistic. The tightening cycle may soon be at an end, the economy exited recession in the last quarter and Indian stock hit a record high this week, something of an outlier compared with its global peers.
Australia & New Zealand
Recent figures show that inflation (YoY) in Australia rose to 7.3% in the third quarter, compared to the target range of 2%-3%. The RBA began to weaken their hawkish stance in the past two months, raising rates by just 25 basis points each time to bring the official rate to 2.85%. The market is currently expecting a 25 basis point rate hike next week as well. Also worth noting is Australia’s third quarter GDP trade balance figures.
New Zealand inflation (YoY) surged 7.2% in the third quarter, compared to the RBNZ’s inflation target range of 1%-3%. Previously, the RBNZ had been raising rates by 50 basis points but that changed last month as they ramped it up with a 75 basis point hike. The current official rate is now 4.25%.
Japan
The Japan Tokyo CPI rose by 3.8% year-on-year in November, up from 3.5% in October and the 3.6% expected. Ex-fresh food and energy it increased by 2.5%, up from 2.2% and above the 2.3% expected. Japan’s manufacturing PMI fell to 49.4 in November, the worst in two years, with both new export orders and overall new orders declining and falling below 50 for the fifth consecutive month, which alines with the unexpected 0.3% fall in Japanese GDP in the third quarter. Japan department store sales rose 11.4% year-on-year in October, down from 20.2% in September.
The poor PMI and retail sales data may have reinforced the BOJ’s view that domestic demand is weak and CPI inflation is largely input and cost driven and, therefore, unsustainable. The central bank will likely continue to pursue an accommodative monetary policy, especially in light of the current poor global economic outlook.
Final GDP for the third quarter is in focus next week, with the quarterly figure expected to be negative meaning the economy may be in recession. Lots of other releases throughout the week but the majority, if not all, are tier two and three.
Singapore
Singapore’s CPI for October was 6.7% (YoY), below expectations of 7.1% and the 7.50% reading. GDP for the third quarter (YoY) was 4.1%, below expectations of 4.2% and 4.40% previously. On the quarter, it was 1.1% down from 1.50%. Next week the only release of note is retail sales on Monday.
Economic Calendar
Saturday, Dec. 3
Economic Events
- ECB President Lagarde chairs a roundtable on “The Global Dimensions of Policy Normalization” at a Bank of Thailand conference
Sunday, Dec. 4
Economic Data/Events
- Thailand consumer confidence
- OPEC+ output virtual meeting
- ECB’s Nagel and Villeroy appear on German television
Monday, Dec. 5
Economic Data/Events
- US factory orders, durable goods orders, ISM services index
- Eurozone Services PMI
- Singapore Services PMI
- Australia Services PMI, inflation gauge, job advertisements, inventories
- China Caixin services PMI
- India services PMI
- Eurozone retail sales
- Japan PMI
- New Zealand commodity prices
- Singapore retail sales
- Taiwan foreign reserves
- Turkey CPI
- European Union sanctions on Russian oil are expected to begin
- ECB President Lagarde gives a keynote speech on “Transition Towards a Greener Economy: Challenges and Solutions”
- ECB’s Villeroy speaks at a conference of French banking and finance supervisor ACPR in Paris
- ECB’s Makhlouf speaks in Dublin
- EU finance ministers meet in Brussels
- The US Business Roundtable publishes its CEO Economic Outlook survey
Tuesday, Dec. 6
Economic Data/Events
- US Trade
- Thailand CPI
- RBA rate decision: Expected to raise Cash Rate Target by 25bps to 3.10%
- Australia BoP, net exports of GDP
- Germany factory orders, Services PMI
- Japan household spending
- Mexico international reserves
- South Africa GDP
- Georgia’s US Senate runoff
- The first-ever EU-Western Balkans summit is held in Albania
- Goldman Sachs Financial Services conference
Wednesday, Dec. 7
Economic Data/Events
- US Trade MBA mortgage applications
- China reserves, Trade
- Australia GDP, reserves
- Eurozone GDP
- Canada central bank (BOC) rate decision: Expected to raise rates by 25bps to 4.00%
- India central bank (RBI) rate decision: Expected to raise rates by 25bps to 6.15%
- Poland central bank rate decision: Expected to keep rates steady at 6.75%
- Singapore reserves
- Germany industrial production
- Japan leading index
- BOJ’s Toyoaki Nakamura speaks in Nagano
- EIA crude oil inventory report
- Foreign policy forum is held in Moscow with Russian Foreign Minister Lavrov speaks at a foreign policy forum in Moscow.
Thursday, Dec. 8
Economic Data/Events
- US initial jobless claims
- Australia trade
- Indonesia consumer confidence
- Japan GDP, BoP
- Mexico CPI
- New Zealand heavy traffic index
- South Africa current account, manufacturing production
- ECB President Lagarde speaks at the European Systemic Risk Board’s sixth annual conference
- SNB’s Maechler participates in a panel discussion
- ECB’s Villeroy speaks at the Toulouse School of Economics
- European Defence Agency holds its annual conference in Brussels
Friday, Dec. 9
Economic Data/Events
- US PPI, wholesale inventories, University of Michigan consumer sentiment
- China CPI
- Russia CPI
- China PPI, aggregate financing, money supply, new yuan loans
- Japan M2
- New Zealand card spending, manufacturing activity
- Spain industrial production
- Thailand foreign reserves, forward contracts
- Portuguese PM Costa, Spain PM Sanchez, and French President Macron attend a meeting in Spain
Sovereign Rating Updates
- United Kingdom (Fitch)
- EFSF (Moody’s)
- ESM (Moody’s)
- Netherlands (Moody’s)
- Saudi Arabia (Moody’s)
