This week’s trading notes: This week enters super central bank week, the highlight is the US Federal Reserve (Fed) announced its December interest rate decision at 3:00 Taiwan time on Thursday ( 15).Other central banks such as Europe, the UK and Switzerland too. Interest rate decisions will be announced later. The November Consumer Price Index (CPI) report, which is the heavyweight of US inflation data, will be released on Tuesday (13) and the market will be paying close attention to whether the data will influence the decision of the Fed on interest rates. Also, major economies will release their Purchasing Managers Indices (PMIs) this week.
This week’s trading notes (1212-1216)
1. Fed announces December interest rate decision, November US CPI
Before the Fed announces its monetary policy decision in December, the heavy US inflation data will be released: the November CPI report, which is an important economic data that could influence the Fed’s decision-making process. The market believes that US inflation could slow: the CPI is expected to increase by 7.3% year-over-year and 0.3% month-on-month in November, compared to 7.7% and 0.4% respectively in the previous period . the important core CPI is expected to increase by 6.1% year-on-year and 0.3% month-on-month, with values of 6.3% and 0.3% respectively.
UBS and Barclays, two Wall Street investment banks, both said that US general and core CPI will slow in November. The former believes that this time the CPI will not rebound in March and July this year , while the latter believes energy prices will drive the overall CPI to slow Inflation has decelerated, but not slowly, and commodity deflation will continue.
The release of data on heavy inflation in the US was followed by the announcement of the Fed interest rate decision in December, the last Fed meeting this year. The market expects the pace of monetary tightening by the Fed will slow . bps) up to 2 yards (50 bps).
In addition, the press conference of Fed Chairman Jerome Powell after the announcement of the decision is also one of the focal points: his views on inflation and the possibility that the US economy falls into recession next year will influence the market . According to CME Group’s FedWatch Tool, the probability of the Fed raising interest rates 2 yards this week is 78.2%, and the probability of raising interest rates 2 yards is 21.8%. 5%.
2. Central Bank Super Week
In addition to the Fed, interest rate decisions from the central banks of Europe, the UK, Switzerland, Norway, the Philippines, Mexico and Russia will also be announced this week.
Among them, the market believes that due toEURInflation in the region slowed for the first time in six months last month, so the European Central Bank could raise interest rates by 2 metres, but given theEURThe region’s CPI annual growth rate is still 10%, so the possibility of the European Central Bank raising interest rates by 3 meters for the third time cannot be ruled out. Some hawkish politicians have indicated their support for the interest rate increase.
It is worth noting that the European Central Bank’s interest rate decision in December could also be influenced by the new quarterly economic forecasts.EURRegional economic growth could be revised downwards and inflation forecasts could be revised upwards. In addition, ECB policy makers will also decide to scale it down to €500 millionEURAt the moment, economists expect the European Central Bank to start reducing its balance sheet in the first quarter of next year.
As with other central banks, UK, Swiss and Norwegian banks are expected to raise borrowing costs again. While the pace of interest rate hikes by central banks is slowing, the battle against inflation is not yet finished. The interest rate futures market shows that the Bank of England interest rate will reach 4.6% in September next year and fall to 4.5% by the end of the year.
Furthermore,EURChina, Germany, India and the UK will release their latest CPI reports one after another.
3. PMI indices of the main economies
Japan, United Kingdom, Germany,EURThe region and the US will announce December PMI. In the event of growing concerns about the economic downturn, PMI new orders, employment and price indicators will help the market understand the latest economic trends. In recent months, supply bottlenecks have eased and demand has cooled The PMI price index fell across the board.
