Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

<b> MARKET</b> ANALYSIS <b> MARKET</b> ANALYSIS

MARKET ANALYSIS

Cutting-Edge Market Commentary for Informed Strategy Making

WEEKLY OUTLOOK 12.12.2022 - 16.12.2022


Major central banks wrap up 2022 inflation war this week with a new battle ahead of the holidays. According to futures funds with 78% probability expectations for the Fed, is a hike of 50 basis points on Wednesday immediately after the US inflation data on Tuesday. A one-two punch not to be missed.

While solid latest jobs data and November's wage increase reignited inflation concerns and US producer prices rose slightly on Friday, US inflation data is expected to be cooler on Tuesday, at 7 .3% from 7.7% in the previous month.

The US central bank has raised interest rates by 375 points so far this year in the fastest rate-hiking cycle since the 1980s. In 2022, hopes for an accommodative Fed have not materialized. Powell has warned on more than one occasion that an early end to the tightening cycle may not be a good strategy, even though the November meeting minutes had once again sparked hopes of a slower pace of hikes. The chairman argued that the Fed's rate hikes could lead to a recession, but stressed that the central bank is not trying to force one, however superficial, as many economists warned by various economic indicators predict. Not least in this sense, Yellen, Secretary of the Treasury.

We'll see if the Fed's decisions will lead or dampen the so-called Santa Claus Rally and if the Fed will surprise Santa Claus this year. In Powell's last press conference of the year, however, the focus will be entirely on the search for signs and possible references to a recession in 2023.

Similar one-two punch also for the BoE. Paired inflation and interest rate decision. The expectation of a 50 basis point hike for the central bank is similar. In the UK, however, inflation does not seem to want to cool down with an expectation of 10.9%, slightly lower than 11.1 in October, a maximum value of 41 years. Here, in addition to the increase in energy prices and the effects of the pandemic, which continues to be alive more than in other parts of the old continent, the labor shortage caused by Brexit adds up. The new Sunak government introduced a tough budget after experiencing the impossibility of the easing previously proposed by Truss.

Coming off a 0.6% drop in inflation in November, the ECB led by Madame Lagarde is also expected to be poised for a 50 basis point hike on Thursday. Since July, the European Central Bank has posted a total increase of 200 points.

The SNB will also meet on Thursday with an expectation for the Swiss central bank of a 50 basis point increase after inflation stood at 3.0% in November, the same level recorded in October, thus confirming the slowdown compared to 3.5% in August, when the maximum of 1993 was reached.

During the week there will be OPEC and IEA monthly reports that will show how the data are experienced by sellers and buyers, with the Paris-based agency and led by Birol, in prospects for a recession as early as this summer.

Crude prices come off their worst week in nine months, weighed down by headlines about recession, China's COVID situation and capping Russian oil prices.

Putin over the weekend said attempts to curb Russian oil gains with price caps won't work, as Russia was already selling its crude at around $60 a barrel. Xi Jinping, on the other hand, on an official visit to Riyadh, declared that Chinese purchases of Saudi oil will increase and resuming the dialogue suspended in the spring to use the yuan for trade with the Gulf countries. This would increase the affirmation of the Chinese currency internationally and weaken the dollar as a technical currency of world trade with the placid approval of Crown Prince Mohammed Bin Salmán, disappointed by Biden's historic defense alliance with the United States.



Monday 12 December

Time CET

Cur.

Event

Forecast

Previous

20:00

USD

Federal Budget Balance (Nov)

-248.5B

-88.0B

21:25

CAD

BoC Gov Macklem Speaks


Tuesday 13 December

Time CET

Cur.

Event

Forecast

Previous

0:30

NZD

Westpac Consumer Sentiment

87.6

8:00

GBP

Unemployment Rate (Oct)

3.70%

3.60%

8:00

EUR

German CPI (YoY) (Nov)

10.00%

10.00%

8:00

EUR

German CPI (MoM) (Nov)

-0.50%

-0.50%

11:00

EUR

German ZEW Economic Sentiment (Dec)

-26.4

-36.7

12:00

GBP

BoE Gov Bailey Speaks

13:00

USD

OPEC Monthly Report

14:30

USD

Core CPI (MoM) (Nov)

0.30%

0.30%

14:30

USD

Core CPI (YoY) (Nov)

6.10%

6.30%

14:30

USD

CPI (YoY) (Nov)

7.30%

7.70%

14:30

USD

CPI (MoM) (Nov)

0.30%

0.40%

22:30

USD

API Weekly Crude Oil Stock

-6.426M

23:30

AUD

RBA Governor Lowe Speaks


Wednesday 14 December

Time CET

Cur.

Event

Forecast

Previous

0:30

AUD

Westpac Consumer Sentiment (Dec)

-6.90%

0:50

JPY

Tankan Large Manufacturers Index (Q4)

6

8

0:50

JPY

Tankan Large Non-Manufacturers Index (Q4)

17

14

8:00

GBP

CPI (MoM) (Nov)

0.60%

2.00%

8:00

GBP

CPI (YoY) (Nov)

10.90%

11.10%

8:00

GBP

PPI Input (MoM) (Nov)

0.20%

0.60%

8:30

CHF

PPI (MoM) (Nov)

0.20%

10:00

USD

IEA Monthly Report

16:30

USD

Crude Oil Inventories

-0.680M

-5.187M

20:00

USD

FOMC Economic Projections

20:00

USD

FOMC Statement

20:00

USD

Fed Interest Rate Decision

4.50%

4.00%

20:30

USD

FOMC Press Conference

22:45

NZD

GDP (QoQ) (Q3)

0.90%

1.70%


Thursday 15 December

Time CET

Cur.

Event

Forecast

Previous

1:30

AUD

Employment Change (Nov)

17.0K

32.2K

9:30

CHF

SNB Interest Rate Decision (Q4)

1.00%

0.50%

9:30

CHF

SNB Monetary Policy Assessment

10:00

CHF

SNB Press Conference

11:00

EUR

EU Leaders Summit

13:00

GBP

BoE Interest Rate Decision (Dec)

3.50%

3.00%

13:00

GBP

BoE MPC Meeting Minutes

14:15

CAD

Housing Starts (Nov)

255.0K

267.1K

14:15

EUR

ECB Monetary Policy Statement

14:15

EUR

ECB Interest Rate Decision (Dec)

2.50%

2.00%

14:30

USD

Initial Jobless Claims

230K

230K

14:30

USD

NY Empire State Manufacturing Index (Dec)

-1

4.5

14:30

USD

Philadelphia Fed Manufacturing Index (Dec)

-12

-19.4

14:30

USD

Retail Sales (MoM) (Nov)

-0.20%

1.30%

14:45

EUR

ECB Press Conference

16:15

EUR

ECB President Lagarde Speaks


Friday 16 December

Time CET

Cur.

Event

Forecast

Previous

1:30

JPY

Services PMI

50.3

8:00

GBP

Core Retail Sales (YoY) (Nov)

-5.80%

-6.70%

8:00

GBP

Core Retail Sales (MoM) (Nov)

0.20%

0.30%

8:00

GBP

Retail Sales (MoM) (Nov)

0.30%

0.60%

8:00

GBP

Retail Sales (YoY) (Nov)

-5.70%

-6.10%

9:30

EUR

German Manufacturing PMI (Dec)

46.2

46.2

9:30

EUR

German Services PMI (Dec)

46.2

46.1

10:30

GBP

Composite PMI

48.2

10:30

GBP

Manufacturing PMI

46.5

46.5

10:30

GBP

Services PMI

49.2

48.8

11:00

EUR

Core CPI (YoY) (Nov)

5.00%

5.00%

11:00

EUR

CPI (YoY) (Nov)

10.00%

10.00%

11:00

EUR

CPI (MoM) (Nov)

-0.10%

1.50%

11:00

EUR

Trade Balance (Oct)

-44.5B

-34.4B

19:00

USD

U.S. Baker Hughes Oil Rig Count

625

19:00

USD

U.S. Baker Hughes Total Rig Count

780



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