What 5 Events Will Traders Be Watching This Week?

20 Dec – 24 Dec, 2021

*Please note; The author is working from UTC +13 when determining the timeline of data releases.

20 Dec – 24 Dec, 2021

Monday, December 20:

China’s loan prime rate 1Y and 5Y is updated Monday afternoon. 

Rising costs, a slowing economy, and the solvency of Chinese real estate companies are very much a concern for the Chinese economy at the moment. Thus, the People’s Bank of China (PBoC) has recently reduced the Reserve Requirement Ratio (RRR) for retail banks on December 15, which is seen as targeted support for the country’s smaller firms. 

However, the PBoC cutting its benchmark 1Y and 5Y rate is less likely after it has already tinkered with the RRR. As it stands, the PBoC’s 1Y rate is 3.85%, while its 5Y rate is 4.65%. It is expected the loan prime rates will remain as is.

Tuesday, December 21:

Germany’s GfK Consumer Confidence January report is released Tuesday night. 

Excluding two bright spots in October and November, the GfK report has registered negative values all year.

January’s report is expected to turn even lower, from its current -1.6 to -2.7. 

Inflation (at 5.2%) and all-time high Natural Gas prices appear to be the main reasons for the low consumer confidence.

Wednesday, December 22:

The Bank of Japan (BoJ) Monetary Policy Meeting Minutes are released on Wednesday, just before 1 pm. 

Traders will be looking for awareness from the BoJ that producers may finally be passing rising costs onto consumers. The BoJ acknowledgement should go some way to temper concerns that may arise from the release of the Japanese Inflation Rate YoY for November, forecast to reach 0.4%, a 20-month record, on Friday 25.  

Thursday, December 23:

The GfK Consumer Confidence index (December) for the United Kingdom is released on Thursday afternoon. 

UK consumers are reeling from much of the same issues afflicting Germans. The UK’s inflation reading for November was 5.1%, the highest rate since September 2011. The index is expected to turn lower by a couple of points to -16. 

The surprise turn by the Bank of England (BoE) last week to hike interest rates 15 basis points to 0.25% will have been too late to filter into the GfK Consumer Confidence index for December.

Friday, December 24:

Data releases can still be found on Christmas eve. Perhaps the most critical data point released today is the United States Durable Goods Orders (November).

After two months of falling demand, forecasts are expected an upturn of 1.1 to 1.5%. However, when the orders for durable goods excludes the biggest ticket items such as aircraft and transport, the US manufacturer sector looks a little more robust. For example, October’s United States Durable Goods Orders grew 0.8% but was dragged down by a -21.8% drop in defence aircraft and parts.