What mattered last week and a preview of the week ahead 16th December

What mattered last week:

  • Another week of gains and fresh all time highs for the U.S. stock market after the U.S. and China reached a phase 1 trade agreement and the U.S. Congress narrowly avoided another government shutdown.
  • In the UK, Boris Johnsons Conservative Party won the general election with a big majority which puts the UK on course to leave the EU on January 31st.
  • ECB President Lagarde’s first ECB meeting reaffirmed a commitment to Draghi’s stimulus program & she sounded optimistic that growth in the EU may be bottoming.
  • In Australia, the ASX200 gained 0.50% to close near 6740 after rises in resources stocks offset falls in defensives and other yield sensitive stocks.
  • A good week also for commodity prices including iron ore and copper boosted by the positive news on trade.
  • In FX, the AUDUSD traded above its 200 day moving average for the first time since April 2019, before staging a hasty retreat.

For the week ahead, the key events are:

Australia: RBA meeting minutes (Tuesday), home loan data (Tuesday).

  • RBA meeting minutes (Tue): The minutes from the last RBA meeting are likely to reaffirm that the RBA remains open to cutting interest rates in 2020 and will continue to closely “monitor developments”.

New Zealand: Global dairy trade auction, current account, ANZ business confidence (Wednesday), balance of trade, Q3 GDP (Thursday), ANZ Roy Morgan consumer confidence (Friday).

China: Fixed asset investment, industrial production, retail sales (Monday), loan prime rate 1yr and 5yr (Friday).

Japan: Jibun Bank PMI’s (Monday), balance of trade (Wednesday), BoJ interest rate decision (Thursday), CPI (Friday).

U.S.: Markit PMI’s, building permits, housing starts, industrial production, capacity utilisation (Monday), current account, existing home sales (Thursday), personal income and spending (Friday).  

  • Markit PMI’s (Mon): The market is looking for business conditions to consolidate in December after an encouraging rebound in November.

Canada: CPI (Thursday), retail sales (Friday).

Euro Area: German and EA Markit PMI’s (Monday), EA balance of trade (Tuesday), IFO business survey (Wednesday),  EA current account and consumer confidence (Friday).

UK:Markit/CIPS PMI’s (Monday), employment (Tuesday), CPI and PPI (Wednesday), retail sales and BoE interest rate meeting (Thursday), GFK consumer confidence, current account (Friday).

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