The difference contract is a complex trading tool, and it is risk of rapid losses due to leverage.

You should consider whether to understand how the difference contract operates, and whether you have the ability to bear the high risk of losing funds.

The difference contract is a complex trading tool, and it is risk of rapid losses due to leverage.

You should consider whether to understand how the difference contract operates, and whether you have the ability to bear the high risk of losing funds.

The difference contract is a complex trading tool, and it is risk of rapid losses due to leverage.

You should consider whether to understand how the difference contract operates, and whether you have the ability to bear the high risk of losing funds.

News & Analysis

WEEKLY OUTLOOK

Focus on PMI, Australia and Canada monetary policy meetings, and GDP Carolane de Palmas

December 02, 2022

On Monday 5th: Services PMIs are due for Japan, China, Spain, Italy, France, Germany, the EU, the UK, and the US, and Composite PMIs will be published for the EU and UK. Christine Lagarde will speak at a conference.


On Tuesday 6th: Australia’s Reserve Bank meets on monetary policy, the UK Construction PMI is due and the Canadian Ivey PMI will be published.


On Wednesday 7th: Australia and the EU report on GDP, Canada’s Central Bank meets on monetary policy, and the US Crude Oil Inventories are due.


On Thursday 8th: Japan’s GDP is published, Christine Lagarde will make a speech and the US reports on Initial Jobless Claims.


On Friday 9th: China releases its CPI figures, the US reports on PPI data and the US Michigan Consumer Sentiment Survey is due.


Weekly outlook


Earnings season has mostly drawn to a close and most of the major corporations have lodged their reports for Q3 in recent weeks. Costco is due to report its fiscal Q1 earnings this week however. Revenue increased by 15% to $72.091 billion in the four weeks ending on August 28, while diluted profits increased by 11.7% year over year to $4.20 per share. Sales at the discount retailer were lower than anticipated in November, pointing to a possible slowdown in consumer spending in the last months of the year.


Homeowners in Australia and Canada will be holding their breath for what’s to come of monetary policy in their respective countries and how that relates to their mortgage payments. While it’s looking like a slowing of pace is approaching for Aussies, there are forecasts for more front-loading of rate hikes in Canada.


Monday 5th of December


A number of countries release their Services PMIs on Monday for a look at how the sector is currently performing. A value over 50 indicates sector expansion, while a reading below 50 indicates contraction. Policymakers and traders actively monitor these polls because purchasing managers often get firm performance data before the real data is released.


Reports for November from Japan, China, Spain, Italy, France, Germany, the EU, the UK, and the US are all due, along with some Composite PMIs that include Services in addition to manufacturing from the EU, and the UK. The vast majority of results are expected to stay in or move towards contraction, the most notable example is the UK, which is looking at a full point drop for both PMIs that are currently sitting around 48.5.


Christine Lagarde, President of the ECB, is due to give a speech in Cambodia, with the theme “Transition towards a greener economy: Challenges and solutions.”


Tuesday 6th of December 


The Reserve Bank of Australia meets for its monetary policy meeting today, and will decide how much to continue raising rates. Most expectations are for a 25 basis point jump to 3.10%, bringing the total for rate increases to 300 basis points since May this year. CPI dropped slightly from 7.3% to 6.9% last month, so the hope is that the rate increases will reduce in the near future.


The Construction PMI for the UK is due, which is forecast for a reasonable drop just short of what is generally considered to be contraction. Potentially falling from 53.2 to 50.5 will not be a surprise given the economic circumstances the country is facing.


The Ivey PMI from Canada will also show how the country’s manufacturing companies are faring in the current economic climate. Recent results have been mixed, but generally favoring expansion.


Wednesday 7th of December 


Australian and Eurozone GDP figures are published today for Q3. Australia is expected to be maintaining steady numbers, increasing from 0.9% to 1.0% in the quarter, and dipping from 3.6% to 3.5% compared to last year. The EU is forecast to hold steady at 0.2% for the quarter and an increase in GDP for the year compared to last, up from 2.1% to 3.9%.


The Canadian Central Bank meets on monetary policy to decide where to set its benchmark rates on Wednesday. Most forecasts are for a 50 basis points increase, putting the total for increases this year to 400 basis points since March. Inflation in the country is sitting at 6.9% and is expected to hold steady later this month or slowly start to decline.


EIA Crude Oil Inventories is also due, which monitors the weekly change in US businesses’ commercial crude oil stocks. Inventory levels affect the price of oil, which may affect inflation. Expectations are for an increase from -12.580M to -2.758M


Thursday 8th of December


Japan releases its key GDP data today. At its last report, the country’s third quarter’s GDP shrank at an annualized rate of 1.2%, moving backwards for the first time since last year as the country’s import bill increased due to currency depreciation.


ECB President Lagarde is scheduled to make the opening comments at a virtual conference that the European Systemic Risk Board is hosting. Market volatility is often experienced during her speeches, as investors are interested to hear of any clues of upcoming monetary policy updates.


The US Unemployment claims report is also due and will show how many people applied for unemployment benefits for the first time in the last week.


Friday 9th of December


Chinese CPI data is due to be published on Friday. Inflation has been dropping in recent months. Last month, the figure dropped from 2.8% to 2.1% year on year, beating expectations for a drop to 2.4%. As COVID-19 lockdowns have halted economic activity in China this year, pricing pressures have cooled.


US PPI data will be published today. The Producer Price Index (PPI) tracks input costs for raw, semi-finished, and completed products and service, and is an important metric for looking at price stability. Last month’s figure of 0.2% was lower than expectations of an increase to 0.4%.


Also from the US, the Michigan Consumer Sentiment Survey for December will show the severity of existing and predicted economic circumstances based on a survey of around 500 consumers. Expectations are for an increase from 56.8 to 59.5.

 

 

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