Publications of important macroeconomic data, decisions of central banks of England, Sweden, Norway and Japan – these are the events that are worth paying attention to during the week of December 16-22.
Last week brought two very positive news for investors: the Conservative Party's victory in Great Britain and a phase one of trade agreement between the United States and China.
Therefore, two very large potential risk factors for markets have been eliminated. Hence, at the end of the year investors can again focus on macroeconomic data releases, which will be published this week. On Friday, December 20 at 14:30 in the US the final estimate of GDP growth in the third quarter will be published, and market forecasts indicate an increase of 2.1 percent compared to 2.0 percent from the previous period. Growth is to be increased by household consumption, government spending and private inventory. On the same day at 16:00 the US personal income and spending report will be published, including PCE inflation measures that are important for the Fed.
On Thursday, December 19, the Bank of England will decide on interest rates, which will have the opportunity to respond to the situation after the election and a long-term view of interest rates. The market expects the Bank to leave interest rates unchanged, but the distribution of votes in the Monetary Policy Committee may change. At the previous meeting, there were two votes for lowering interest rates with seven votes for no change. It is possible that the less uncertainty about Brexit associated with the Conservative Party victory may change this proportion of votes.
On Thursday, there will be also decisions of: the Bank of Japan, the Bank of Sweden and the Bank of Norway. Therefore, in terms of interest rates, it can be a special day on which special attention should be paid to the Swedish Riksbank. Well, this central bank may already say goodbye to negative interest rates, because it is expected that the main interest rate could rise from -0.25 percent to 0.00 percent. In Sweden, negative interest rates were introduced in February 2015.
Daniel Kostecki, chief analyst at Conotoxia Ltd., a company from the group to which Cinkciarz.pl Sp. z o.o.
The above comment is not a recommendation within the meaning of the Regulation of the Minister of Finance of October 19, 2005. It has been prepared for information purposes and should not be the basis for making investment decisions. Neither the author of the study nor Conotoxia Ltd. are responsible for investment decisions made on the basis of the information contained in this commentary. Copying or reproduction of this document without the written permission of Conotoxia Ltd. is prohibited.
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