Weekly Outlook, Dec 6 – 10, 2021: Top Economic Events to Watch This Week

Posted Monday, December 6, 2021 by
Arslan Butt • 3 min read

The broad-based US dollar will end this week on a bullish track, as markets adopt a broadly calmer tone. Earlier this week, the United States Federal Reserve backed up Chairman Jerome Powell’s hawkish stance. President Mary Daly of the San Francisco Fed suggested that it might be time to “start building a plan” to raise interest rates to battle inflation, while Richmond Fed President, Thomas Barkin, endorsed “normalizing policy.” Thus, the chances of the central bank raising the target rate by a quarter-point at its June 2022 meeting are increasing. Overnight, stories about the newly discovered Omicron COVID-19 variation were “net positive,” helping risk sentiment recover. “We foresee further volatility,” because the first assessments of the efficacy of existing vaccines are likely still a week or so away.”

Looking at the week ahead, the Eurogroup Meeting, the BOC Rate Statement, and the RBA Rate Statement and Core CPI m/m, are likely to generate plenty of news to keep the markets moving. Besides this, coronavirus news will be actively monitored because it may play a crucial role in determining market risk levels.

The Top Economic Events to Watch This Week

1. Eurogroup Meeting – Monday – 00:00 GMT

The Eurogroup President, the Finance Ministers of each Eurozone member state, the Commissioner for Economic and Monetary Affairs and the President of the European Central Bank all attend the Eurogroup meetings. The Chairman of the EFC’s Eurogroup Working Group also attends, to present the preliminary work of the group.

2. RBA Interest Rate Decision: – Tuesday – 3:30 GMT

RBA Interest Rate Decision: The Reserve Bank of Australia announces its interest rate decision. It is beneficial, or bullish, for the AUD if the RBA is hawkish about the economy’s inflationary prospects and raises interest rates. Similarly, if the RBA has a dovish view of the Australian economy and maintains or lowers the interest rate, it is considered negative or bearish.

Previous Release

ACTUAL: 0.1 %

DEV: 0.00

CONS: 0.1 %

Last Released

Tue, Nov 2, 2021, 03:30

ii) RBA Rate Statement:

The Reserve Bank Board makes interest rate decisions, which are announced in a media release after each board meeting, at 2.30 p.m. It’s one of the main instruments the RBA Reserve Bank Board employs to convey monetary policy to investors. It includes the conclusion of their interest rate decision and a discussion of the economic conditions that have impacted it. Most significantly, it explains the economic prognosis and hints at how future decisions will turn out.

3. Canada, BoC Interest Rate Decision – Wednesday – 15:00 GMT

The Bank of Canada (BoC) releases its interest rate decision. It is beneficial, or bullish, for the CAD if the Bank of Canada is hawkish about the economy’s inflationary prospects and raises interest rates. Similarly, if the Bank of Canada (BoC) has a dovish assessment of the Canadian economy and retains or lowers the interest rate, it is considered negative or bearish.

ii) BOC Rate Statement:

The Bank of Canada (BoC) uses this statement as its principal means of communicating with investors about monetary policy decisions, particularly interest rate changes. This is one of the most common ways the BOC uses to communicate with investors about monetary policy. It delves into the issues that have influenced the most recent interest rate decision, including the broader economy and inflation. Most significantly, it reveals information about future monetary policy.

4. RBA Gov Lowe Speaks – Thursday – 22:00 GMT

Philip Lowe has replaced Glenn Stevens as governor of Australia’s central bank. Lowe was previously the Deputy Governor of the Reserve Bank of Australia, a position he had held since February 2012. Philip Lowe has more control over the value of the AUD than any other person, as he is the head of the central bank, which controls short-term interest rates. A dovish tone regarding the outlook of the Australian economy is understood as bearish for the Australian currency; likewise, a hawkish tone over the outlook of the Australian economy is considered a bullish or positive factor for the Australian Dollar.

5. United States Consumer Price Index (MoM) – Friday – 13:30 GMT

The US Bureau of Labor Statistics’ Consumer Price Index measures price changes, based on a comparison of the retail prices of a sample shopping basket of goods and services. Inflation reduces the purchasing power of the US dollar.

The Consumer Price Index (CPI) is a key indicator for measuring inflation and changes in purchasing patterns. In general, a high rating for the USD is considered favourable (or bullish), while a low reading is considered negative (or bearish).

Previous Release

ACTUAL: 0.9 %

DEV: 1.74

CONS: 0.6%

Last Released

Wed, Nov 10, 2021, 13:30

ii) United States Consumer Price Index ex Food & Energy (MoM)

The US Department of Labor Statistics’ Consumer Price Index (CPI) Ex Food & Energy measures price changes, based on a comparison of the retail prices of a sample shopping basket of goods and services. Volatility products such as food and energy are omitted to capture an exact calculation. In general, a high rating for the USD is considered favourable (or bullish), while a low reading is considered negative (or bearish).