Major market moving events for 51st week of 2015

Author Haresh Menghani Category Fundamental Analysis 14 Dec 2015 Updated at 12:18 CET
Although last week's release of monthly retail sales data from a relatively thin US economic calendar was broadly in-line with economists’ expectations, the US Dollar (USD) lost ground against most major currencies. Although, an interest-rate hike from this week's FOMC meeting is widely expected, but concerns over global growth, led by renewed sell-off in crude oil, has raised speculations that the Fed might slow the pace of monetary tightening in 2016, eventually dragging the key USD Index (I.USDX) lower to record its second straight weekly loss.
This week's key agenda would be the highly important Federal Reserve meeting on Tuesday-Wednesday. The broad consensus among central bank watchers is that the central bank will end its zero interest rate policy and hike the federal funds rate for the first time since 2006. The USD up-move over the past few months suggests that the upcoming lift-off in December might have been already priced in by the market. However, the broader question for investors is the projected pace of monetary tightening by the Fed as the central bank remains concerned over the weak pace of inflation. The FOMC decision will be accompanied with an update on FOMC's projection for inflation and economic growth and would be followed by a press conference by the Fed Chair Janet Yellen. The Fed Chairwoman Janet Yellen's comments during the press conference will be used to evaluate the pace of monetary tightening by the Fed once a rate-hike announcement is made on Wednesday.
Ahead of the Fed announcement, investors will also get an update on the second aspect of the Fed's dual mandate, price stability; i.e. inflation data. The latest read on US inflation, for the month of November, is scheduled for release on Wednesday. The report on consumer prices is expected to show CPI holding flat on a month-on-month basis while core CPI, which excludes food and energy, is expected to rise by 0.2%.
In other economic releases from the US, investors will confront the release of two regional manufacturing indices, namely - Empire State Manufacturing Index and Philly Fed Manufacturing Index, scheduled for release on Tuesday and Thursday respectively. Investors will also get an update on the US housing sector as the Commerce Department is scheduled to release reports on building permits and housing starts for the month of November on Wednesday.
In other central bank actions, the Bank of Japan (BoJ) is scheduled to release its monetary policy statement, which will be followed by a press conference, on Friday. The central bank is expected to leave its policy unchanged. Market participants, however, will closely scrutinize central bank's view about the economic conditions and its willingness to further expand its economic stimulus measures. Following the much awaited FOMC decision, any unexpected policy action might lead to a knee-jerk reaction for JPY pairs.
Australian central bank (RBA) is also scheduled to release the minutes of its latest monetary policy meeting. Following the release of better-than-expected Chinese industrial production data on Saturday last week, the minutes would provide central bank's view of the economic conditions that influence their decision to leave its benchmark interest rates unchanged at 2.00%.
From UK, the key highlights from this week's economic calendar includes the release of inflation data, employment report and monthly retail sales data, scheduled for release on Tuesday, Wednesday and Thursday respectively. The latest print of the UK inflation, which remained negative for a second consecutive month in October, is expected to rise by 0.1% on a year-on-year basis.
The UK labor market report is expected to show the number of people claiming for unemployment related benefits to have risen by 0.9K during the month of November, while the unemployment rate held steady at 5.3%. Meanwhile, the average earnings index for the month of October is expected to come-in at 2.5% as compared to 3.0% recorded during the month of September. Consumer spending (retail sales data), which remains supportive pillar of UK's economic recovery, is expected to reverse its disappointing reading of -0.6% in October to show 0.6% growth for the month of November.
In addition to this, traders will also watch for some meaningful releases from other parts of the world. Few of the releases from the Euro-zone include, German ZEW economic sentiment on Tuesday and Euro-zone final CPI print on Wednesday. New Zealand's GDP growth rate for the second-quarter of 2015 is scheduled for release on Thursday. Investors will be particularly focusing on the release of PMI data, a leading indicator of economic health, for both manufacturing and services sector from the Euro-zone. The flash reading of the PMI numbers from Euro-zone's two largest economies, France and Germany, along with the broader Euro-zone PMI for the month of November are scheduled for release on Wednesday.
Elsewhere, Canadian monthly manufacturing sales and inflation data will be looked upon for any respite from last week’s onslaught witnessed on CAD on the back of renewed weakness in crude oil prices.
Compared to the much awaited Federal Reserve's monetary policy decision announcement, this week's economic data releases are unlikely to have a major impact on the Forex market. Further, given that the market consensus already seems to be tilted towards a dovish Fed rate-hike, any signals of a relatively fast-moving interest rate tightening cycle might lead to catastrophic consequences across global financial markets.
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