Weekly Outlook: December 10 - 14
This week investors will look to data on consumer prices and retail sales for the latest update on the health of the U.S. economy.
Markets have dialed back expectations on the pace of Federal Reserve rate hikes in 2019 in the wake of recent market turmoil. Wall Street ended its worst week since March on Friday amid a selloff triggered by concerns over a slowing economy and mounting trade war fears.
Fed Chairman Jerome Powell said last week that U.S. interest rates were nearing neutral levels, which markets interpreted as signaling a slowdown in rate rises.
Data on Friday showed that the U.S. economy created fewer-than-forecast new jobs in November, while October’s figure was revised lower.
Wage growth rose in line with forecasts, keeping the Fed on track to hike interest rates this month. But the report indicated that the labor market may not be as strong as hoped, easing pressure on the Fed to keep hiking rates in 2019.
Investors will also be looking ahead to the Brexit vote and the final monetary policy meeting of the year by the European Central Bank.
On Tuesday the British parliament is to vote on Prime Minister Theresa May’s Brexit plan and if the deal fails to pass, as widely expected, multiple possibilities will be thrown open, including the chance of a second referendum.
Market watchers will also be watching UK GDP data and the jobs report, due out on Monday and Tuesday, respectively.
On Thursday the ECB is widely expected to wind up its three-year long, 2.6 trillion-euro monetary stimulus scheme. It is also expected to leave interest rates unchanged and deliver updated economic forecasts.
The dollar ended lower against a currency basket on Friday after the disappointing U.S. jobs report, with the U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, slipping 0.12% to 96.65.
The euro was little changed against the dollar late Friday, with EUR/USD last at 1.1378.
The yen was also steady against the U.S. currency, with USD/JPY changing hands at 112.68.
The pound was weaker against the greenback and the euro, with GBP/USD down 0.25% to 1.2751 and EUR/GBP rising 0.48% to 0.8943 amid growing opposition to the prime minister’s Brexit plan.
Ahead of the coming week, Investing.com has compiled a list of significant events likely to affect the markets.
Monday, December 10
The UK is to publish its monthly GDP report, along with data on manufacturing and industrial production.
Tuesday, December 11
The UK is to publish its latest employment report.
The ZEW Institute is to report on German economic sentiment.
The U.S. is to produce figures on producer price inflation.
The British parliament is to vote on Prime Minister Theresa May’s Brexit plan that she negotiated with Brussels.
Wednesday, December 12
The euro zone is to release data on industrial production.
The U.S. is to publish consumer price inflation figures.
Thursday, December 13
The Swiss National Bank is to announce its Libor rate and publish its monetary policy assessment.
The European Central Bank is to hold its final policy meeting of 2018, which will be followed by a press conference with President Mario Draghi.
The U.S. is to publish the weekly report on initial jobless claims.
Friday, December 14
China is to release data on industrial production and fixed asset investment.
The euro zone is to release data on private sector business activity.
The U.S. is to round up the week with data on retail sales.