U.S. rate hike and year-end market kickoff! ~ December 17 week’s key data and event schedule ~

◎ This week’s highlights

1)FOMC

This week’s FOMC is expected to raise rates. The focus will be on the dot plot, the statement, and Chair Powell’s press conference. From recent remarks, hot words include “neutral rate” and “timing of the end of rate hikes.” Depending on what the dot plot, the statement, and the press conference say about the “neutral rate,” “end of rate hikes,” and the number of rate hikes next year, there could be USD selling, which I am watching closely.

2)UK Brexit-related

Last week, Prime Minister May faced a leadership confidence vote within the ruling Conservative Party. Although she secured a parliamentary majority and maintained leadership, there remains a possibility of a no-confidence motion from the opposition. Also, May’s participation in the EU summit last weekend did not yield notable results. The Brexit plan remains stalemated. Parliament in the UK will begin its year-end holiday break this weekend. How far will progress be made on Brexit this week? Will May’s position shift? This warrants attention.

3)European fiscal concerns

Last week, European markets saw France’s PMI fall below the 50 threshold, and Germany also underperformed expectations. With potential recession concerns mounting, attention is on France’s protests, fiscal issues, and Italy’s budget plan. Italy announced a revision to its budget deficit from 2.4% to 2.04% of GDP. EU reactions will be interesting. France, facing a PMI below trend, is also under fiscal scrutiny and may need to revisit its budget. Moreover, President Macron’s approval rating is a concern. If a vote or election occurs, Europe could shift back to risk-off. European risk issues remain in focus this week.

4)

End of year market mood

After this week’s major event, the FOMC, the market is likely to enter full holiday mode. If liquidity dries up, price movements could be unpredictable, making risk management crucial. Personally, I plan to end trading for the year.

◎ This week’s calendar of events

Mon, 12/17

16:00 TRY Turkey unemployment rate & industrial production
19:00 EUR Eurozone HICP (consumer price index)

Tue, 12/18

09:30 AUD RBA Board Meeting minutes & Interim Economic Forecast
18:00 EUR Germany IFO business climate index
22:00 HUF Hungary policy rate decision

Wed, 12/19

06:45 NZD Current account
18:00 EUR Hansson Estonia central bank governor speech
18:30 GBPCPI (consumer price index)
22:30 CADCPI (consumer price index)

Thu, 12/20

00:30 USD Crude oil inventories
04:00 USDFOMC policy rate and statement
04:30 USDPowell FOMC press conference
06:45 NZD Quarterly GDPand trade balance
09:30 AUD Employment change & unemployment rate

15:30 JPYKuroda Bank of Japan governor press conference
17:30 SEK Swedish policy rate decision
18:30 GBP Retail sales
21:00 GBPBOE policy rate decision & MPC vote distribution
22:00 CZK Czech policy rate decision
22:30 USD Philadelphia Fed manufacturing index

Fri, 12/21

04:00 MXN Mexico policy rate decision
08:30 JPY CPI (consumer price index)
16:00 EUR German consumer confidence index (Gfk)
16:45 EUR France GDP
17:30 SEK Sweden retail sales
18:30 GBPGDP
22:30 USD GDP & durable goods orders
22:30 CADGDP & retail sales

Sat, 12/22

00:00 USDPCE deflator
00:00 USD University of Michigan consumer confidence
01:00 CAD Budget balance
03:00 USD Baker Hughes rig count