Asian markets are generally higher as the week opened, in response to the rate cut by China's central bank on Friday. Nonetheless, there is no follow through buying seen after initial jump. In the currency markets, dollar pares back some of last week's gain but remains generally firm. Euro is still feeling the pressure from last week's dovish ECB press conference and is trading soft. German Ifo business climate will be the main focus today while UK will release BBA mortgage approvals, CBI trends total orders, US will release new home sales. But these events might not trigger much reactions in the markets. Traders will be cautiously awaiting the heavy weight events later in the week.
Looking ahead, there will be three central bank meetings plus a number of important economic data. FOMC meeting due Wednesday will be most closely watched. While it is widely anticipated that the Fed would stand on the sideline this month, we are interested in seeing policymakers' outlook on economic growth and guidance for future tightening. The RBNZ meeting due Thursday would also bring no change in the monetary decision despite persistent decline in commodity prices and a softer set of economic data for New Zealand. We expect the central bank would prefer to wait for more dataflow and the December meeting could be a decisive meeting. BoJ is expected to keep policies unchanged while there is some speculations for additional stimulus.
Meanwhile, UK and US will release GDP data on Tuesday and Thursday respectively. Markets have been pushing back expectation of rate hike from BoE and Fed and any change in the economic outlook will have further impact on the expectations. Inflation data form Eurozone, Japan and Australia would be released throughout the week. Here are some highlights for the week:
- Monday: German Ifo; US new home sales
- Tuesday: New Zealand trade balance; Japan CSPI; UK GDP, US durables, consumer confidence
- Wednesday: Australia CPI; US trade balance; FOMC
- Thursday: RBNZ; German unemployment; US GDP
- Friday: Japan CPI, BoJ; Eurozone CPI; Canada GDP; US personal income and spending