Week Ahead – Blockbuster end to the year


Two blockbuster events will have Wall Street on edge as the disinflation trade may have gotten ahead of itself. The last major piece of economic news before the Fed meets will be the November inflation report which is expected to show pricing pressures are decelerating.  The headline reading from a month ago is expected to rise 0.3%, a tick lower from the pace in October.  On a year-over-year basis, inflation is expected to decline from 7.7% to 7.3%. There is still a lot more work that needs to be done with bringing inflation down, but for now, it seems the trend is headed in the right direction. 

The FOMC decision will be “Must See TV” as the Fed is expected to downshift to a half-point rate-hiking pace and yet still reiterate that they are not done raising rates.  The Fed will likely show that rates could rise anywhere from 4.75-5.25%, which will be very restrictive and should lead to a quicker cooling of the labor market.  


The ECB meeting next week promises to be a defining moment in the bloc’s fight against inflation. It was late to the party, very late in fact, but once it arrived it quickly started playing catch up culminating in a 75 basis point rate hike last week. The belief is that it won’t have to go as far as others in raising rates, with the terminal rate currently believed to be around 3%. That means the central bank is expected to already slow the pace of tightening on Thursday, with a 50 basis point hike, followed by another 100 over the first three meetings in the new year. 

It’s not just the decision that investors will be focused on. The press conference and new macroeconomic projections will tell us everything we need to know about where the central bank sees itself in the tightening cycle and whether it is aligned with the markets.


It’s all going on in the UK next week. The third week of the month brings a variety of major economic indicators including inflation, employment, retail sales, GDP and PMIs. This month has the added spice of the BoE meeting, the central bank that is arguably most stuck between a rock and a hard place among its peers.

The economy is suffering and probably already in recession, inflation is 11.1% – although that is expected to drop slightly ahead of the meeting – and the cost-of-living crisis in squeezing those households least able to cope with it most. And yet the BoE is of the belief that the only policy response is to keep hiking rates. Markets expect another 50 basis points on Thursday and a further 100-125 in the first half of next year. The central bank has previously pushed back against market positioning and we may see language to the same effect in the statement, not to mention more dovish dissent. 


A week of no change is on the cards, it would appear. The CBR is expected to leave the Key Rate unchanged at 7.5% on Friday, the second consecutive hold after many months of hikes and then cuts following the invasion of Ukraine. On Wednesday, the third quarter GDP reading is also expected to be unchanged at -4% annualized. 

South Africa

The political environment appears to have cooled a little but President Ramaphosa isn’t necessarily safe yet. The focus will remain on this but there’s also inflation and retail sales data in the middle of the week that will be of interest.


A few notable data releases next week although maybe not anything that will move the needle under the circumstances. Unemployment and industrial production stand out.


The SNB is expected to raise its policy rate by 50 basis points to 1% next week as it attempts to get a grip of inflation. It’s currently running at 3%, above its target of below 2% and the SNB has been clear in its determination to bring it down. 


China is facing a potential surge in cases as COVID rules are loosened. Following the protests over the zero-Covid policy in several Chinese cities last week, the Chinese government is pivoting its policy.  The elimination of key tenets of its virus elimination plan suggests they will try to learn to live with the virus.

It will be a busy and not-so-good week of Chinese economic data. At some point this week we will see the release of aggregate financing, new yuan loans, and money supply data.  On Thursday, industrial production, retail sales, fixed assets, and the surveyed jobless rate will be released, with most expecting a softer print. The PBOC is also expected to hold its 1-year medium-term lending facility rate at 2.75% as volumes (CNY) could decline from 850 billion to 500 billion.    


All eyes will be on the November inflation report which could show a deceleration in pricing pressures coming closer to the upper boundaries of the RBI’s 2-6% target. Given the growth slowdown that is forming, inflation could continue its decline next quarter which should help finish the job of bringing it back to target.  India is also expected to see industrial production drop from 3.1% to -0.6%.  

Australia & New Zealand

Following the recent RBA rate decision, investors expect the bank to be nearing the end of its tightening cycle.  The focus for Australia now shifts to business conditions/confidence and the labor market.  The Australian economy is expected to add 15,000 jobs, a slower gain than the 32,000 seen in the prior month.  

New Zealand’s GDP growth will quickly cool as the latest tourist boom eases. Third quarter GDP on a quarterly basis is expected to soften from 1.7% to 0.8%.  


Investors will have to be patient until the spring when the new leadership team has been created. The BOJ policy review could lead to the end of a decade-long ultra-loose monetary policy. The upcoming week is filled with economic data releases. The main highlights include the BOJ’s Tankan report which will show big manufacturers are struggling and non-manufacturing activity got a boost on easing covid rules. The November PPI report will show minimal pricing relief, while the trade deficit is expected to narrow.  The preliminary PMIs could show both manufacturing and service activity are weakening.    


It could be mostly a quiet week for Singapore with the exception of the release of non-oil domestic exports.   

Economic Calendar

Saturday, Dec. 10

Economic Events

The annual Bund Summit continues in Shanghai

The International Coffee Organization conference takes place in Vietnam

Sunday, Dec. 11

China FDI, Aggregate Financing, Money Supply, and New Yuan loans expected this week

Monday, Dec. 12

Economic Data/Events

India CPI, industrial production

Japan PPI, machine tool orders

Kenya GDP

New Zealand net migration

Mexico industrial production

Turkey current account

UK industrial production

Brazil’s presidential election is expected to be certified

Tuesday, Dec. 13

Economic Data/Events

US November CPI M/M: 0.3%e v 0.4% prior; Y/Y: 7.3%e v 7.7% prior

Australia consumer confidence, household spending

Germany CPI, ZEW survey expectations

Hong Kong industrial production, PPI

Israel trade

Italy industrial production

Japan Bloomberg economic survey

New Zealand home sales, food prices

Philippines trade

South Korea money supply

Turkey industrial production

UK jobless claims, unemployment

The Bank of England releases its financial stability report

US House Financial Services Committee holds an initial hearing on FTX’s collapse

US President Joe Biden hosts the US-Africa Leaders Summit

New Zealand’s government releases its half-year economic and fiscal update

Wednesday, Dec. 14

Economic Data/Events

FOMC Decision: Expected to raise the target range by 50bps to 4.25-4.50%

Eurozone industrial production

India trade, wholesale prices

Japan machinery orders, industrial production

Mexico international reserves

New Zealand current account GDP ratio, BoP

Russia GDP

South Africa CPI, retail sales

South Korea jobless rate

Spain CPI


EIA crude oil inventory report

The European Union and the Association of Southeast Asian Nations will celebrate the 45th anniversary of their partnership at a summit in Brussels

US Senate Banking Committee holds a hearing on FTX’s collapse

The US-Africa Leaders Summit continues with keynote remarks from Biden

The Bank of Japan will announce the outright purchase amount of Japanese government securities

RBA Gov Lowe delivers an address at the 2022 AusPayNet Annual Summit

Thursday, Dec. 15

Economic Data/Events

US Retail Sales, cross-border investment, business inventories, empire manufacturing, initial jobless claims, industrial production

ECB Rate Decision: Expected to raise Main Refinancing rate by 50bps to 2.50%

BOE Rate Decision: Expected to raise rates by 50bps to 3.50%

Switzerland rate decision: Expected to raise rates by 50bps to 1.00%

Norway rate decision: Expected to raise rates by 25bps to 2.75%

Mexico rate decision: Expected to raise rates by 50bps to 10.50%

Australia unemployment, consumer inflation expectation

Canada existing home sales, housing starts

China medium-term lending, property prices, retail sales, industrial production, surveyed jobless

Eurozone new car registrations

France CPI

Japan tertiary index, trade

New Zealand GDP

Nigeria CPI

Poland CPI

Spain trade

Friday, Dec. 16

Economic Data/Events

US deadline for a new funding deal to avert a federal government shutdown

US markets observe “Triple witching”, which is the quarterly event where the expiry of stock and index options occur with those of index futures

US preliminary PMIs

Australia preliminary PMI readings 

European flash PMIs: Eurozone, Germany, UK, and France  

Hong Kong jobless rate

Italy CPI, trade

Japan PMIs, department store sales

New Zealand PMI

Russia rate decision: Expected to keep rates steady at 7.50%

Singapore trade

Thailand foreign reserves, forward contracts, car sales

Bank of Finland Governor Rehn speaks on the Nordic nation’s economy

South Africa’s governing party begins its five-yearly elective conference in Johannesburg

Sovereign Rating Updates

Luxembourg (Moody’s)

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam