This week’s trading notes: this week enters the super central bank week, the highlight is the United States Federal Reserve (Fed) announced the December interest rate decision at 3:00 a.m. Taiwan time on Thursday (15th). Other central banks such as Europe, the United Kingdom, and Switzerland also Interest rate decisions will be announced successively. The November consumer price index (CPI) report, which is the heavyweight U.S. inflation data, will be released on Tuesday (13th), and the market will pay close attention to whether the data will affect the Fed’s decision on interest rates. In addition, major economies will release their purchasing managers’ indices (PMI) this week.
This week’s trading notes (1212-1216)
1. Fed announces December interest rate decision, US November CPI
Before the Fed announces its monetary policy decision in December, the heavy inflation data in the US—the CPI report for November will be released, which is an important economic data that may affect the Fed’s decision-making. The market believes that US inflation may slow down. The CPI is expected to rise by 7.3% year-on-year and 0.3% month-on-month in November, compared with 7.7% and 0.4% respectively in the previous period. The most important core CPI is expected to rise by 6.1% year-on-year and 0.3% month-on-month. The values are 6.3% and 0.3% respectively.
UBS and Barclays, two Wall Street investment banks, both said that the overall and core CPI in the United States will slow down in November. The former believes that this time the CPI will not rebound in March and July this year, while the latter believes that energy prices will drive the overall CPI to slow down. Inflation has decelerated but not slowly, and core commodity deflation will continue.
The release of heavy inflation data in the United States was followed by the announcement of the Fed’s interest rate decision in December. This is the last meeting of the Fed this year. The market expects that the pace of monetary tightening by the Fed will slow down. bps) down to 2 yards (50 bps).
In addition, Fed Chairman Jerome Powell’s press conference following the announcement of the decision is also one of the focuses. His views on inflation and the possibility of the US economy falling into recession next year will affect the market. According to CME Group’s FedWatch Tool, the probability of the Fed raising interest rates by 2 yards this week is 78.2%, and the probability of raising interest rates by 2 yards is 21.8%. The terminal interest rate falls in the range of 4.75% to 5%.
2. Super central bank week
In addition to the Fed, interest rate decisions of the central banks of Europe, the United Kingdom, 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 down for the first time in six months last month, so the European Central Bank may raise interest rates by 2 yards, but given theEURThe annual growth rate of CPI in the region is still 10%, so the possibility of the European Central Bank raising interest rates by 3 yards for the third time cannot be ruled out. Some hawkish policy makers have indicated their support for raising interest rates.
It is worth noting that the European Central Bank’s interest rate decision in December may also be affected by the new quarterly economic forecast.EURRegional economic growth may be revised down, and inflation forecasts may be revised up.In addition, ECB policy makers will also decide to reduce its size by up to 500 millionEURAt present, economists predict that the European Central Bank will start shrinking its balance sheet in the first quarter of next year.
As for other central banks, the British, Swiss and Norwegian banks are expected to raise borrowing costs once more. Although the pace of aggressive interest rate hikes by central banks is slowing down, the battle once morest inflation is not over yet. The interest rate futures market shows that the Bank of England’s interest rate will reach 4.6% in September next year and fall at 4.5% by the end of the year.
in addition,EURChina, Germany, India, and the UK will release the latest CPI reports one following another.
3. PMI indexes of major economies
Japan, UK, Germany,EURThe region and the United States will announce the December PMI index. In the case of growing concerns regarding economic recession, PMI’s 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.