The Week Ahead: 11th – 15th December 2023

Overview for the Week Ahead

It is a very busy week ahead!

Stocks closed out the first full trading week of December with a win on Friday as investors assessed the US monthly jobs report in a positive light, embracing the case that the Federal Reserve will start cutting interest rates next year. Stocks turned positive as market watchers saw more evidence of a soft landing for the economy.

The Swiss franc touched the strongest level against the euro since the Swiss National Bank abandoned a currency cap almost nine years ago, as traders bet the European Central Bank will move faster to cut interest rates.

The franc climbed to 0.94087 per euro, the strongest since January 2015, before erasing the gains. It topped the peak set when the SNB roiled global financial markets with its unexpected move to end limits on how its currency traded against the common currency, which sent the franc soaring.

Now, however, the move reflects a shift in interest-rate expectations. Investor confidence is growing that the ECB will move to cut rates as soon as the first quarter of next year, earlier than its Swiss counterpart, even as officials at the central bank try to push back against cuts coming so soon.

On Tuesday, ZEW Economic Sentiment numbers for Germany and the Eurozone will influence the EUR/USD. Recent economic indicators have sent mixed signals, giving the report greater weight. German factory orders, industrial production, and trade figures from Germany contrasted with better-than-expected survey-based data.

Eurozone industrial production figures (Wed) warrant consideration before the ECB monetary policy decision (Thurs). A weak macroeconomic backdrop and softer euro area inflation have fueled bets on an H1 2024 ECB rate cut. Forward guidance on inflation, the economy, and interest rates will move the dial.

On Friday, inflation numbers from France, private sector PMIs, Eurozone wage growth, and trade data wrap up a busy week. Inflation, Services PMIs, and wage growth will likely influence buyer appetite for the EUR/USD.

Average earnings and the unemployment rate (Tues) will move the GBP. Wage growth remains a bugbear for the Bank of England. Steady numbers could support the Bank of England’s dismissal of interest rate cut discussions.

On Wednesday, the GDP Report will also warrant consideration. A resilient UK economy would allow the BoE to maintain interest rates at current levels for longer.

The BoE will deliver its final monetary policy decision of 2023 on Thursday. Forward guidance on inflation, the economic outlook, and the likely timing of rate cuts will move the dial. We also expect the vote split to draw interest.

Preliminary private sector PMIs for December will be in focus on Friday. The services sector accounts for over 70% of the UK economy and will have more impact. Notably, the services sector is also a contributor to inflation. A pickup in service sector activity could give the BoE more reason to maintain a hawkish rate path.

For China, Industrial production, retail sales, fixed asset investment, and unemployment figures will impact market risk sentiment.

Softer numbers could raise further concerns about the Chinese economy. Recent trade figures signalled a weak demand environment.

Away from the economic calendar, stimulus chatter from Beijing would impact market risk sentiment.

Have your trading charts ready this week!

This Week’s High Impact Events

The times below are GMT +2.

Monday 11^th December

No High Impact Events

Potential instruments to Trade: USD Crosses. 

Tuesday 12^th December

00.20 – Australia – RBA Gov Bullock Speaks

Potential instruments to Trade: AUD Crosses. 

09.00 – UK – Claimant Count Change

Potential instruments to Trade: GBP Crosses. 

15.30 – US – Core CPI m/m, CPI m/m, CPI y/y

Potential instruments to Trade: USD Crosses. 

Wednesday 13^th December

09.00 – UK – GDP m/m

Potential instruments to Trade: GBP Crosses. 

15.30 – US – Core PPI m/m, PPI m/m

Potential instruments to Trade: USD Crosses. 

21.00 – US – FOMC Economic Projections, FOMC Statement

Potential instruments to Trade: USD Crosses. 

21.30 – US – FOMC Press Conference

Potential instruments to Trade: USD Crosses. 

Thursday 14^th December

00.20 – Australia – Employment Change, Unemployment Rate

Potential instruments to Trade: AUD Crosses. 

10.30 – Switzerland – SNB Monetary Policy Assessment, SNB Policy Rate

Potential instruments to Trade: CHF Crosses. 

11.00 – Switzerland – SNB Press Conference

Potential instruments to Trade: CHF Crosses. 

14.00 – UK – Monetary Policy Summary, MPC Official Bank Rate Votes, Official Bank Rate

Potential instruments to Trade: GBP Crosses. 

15.15 – Europe – Main Refinancing Rate, Monetary Policy Statement

Potential instruments to Trade: EUR Crosses. 

15.30 – US – Core Retail Sales m/m, Retail Sales m/m, Unemployment Claims

Potential instruments to Trade: USD Crosses. 

15.45 – Europe – ECB Press Conference

Potential instruments to Trade: EUR Crosses. 

Friday 15^th December

04.00 – China – Industrial Production y/y

Potential instruments to Trade: CNY Crosses. 

From 10.15 – Europe – Flash Manufacturing PMI, Flash Services PMI

Potential instruments to Trade: EUR Crosses. 

11.30 – UK – Flash Manufacturing PMI, Flash Services PMI

Potential instruments to Trade: GBP Crosses. 

15.30 – US – Empire State Manufacturing Index

Potential instruments to Trade: USD Crosses. 

16.45 – US – Flash Manufacturing PMI, Flash Services PMI

Potential instruments to Trade: USD Crosses. 

19.25 – Canada – BoC Gov Macklem Speaks

Potential instruments to Trade: GBP Crosses. 

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