In the UK, the monthly GDP report continues to slow, and fell to 0.4% in October, its lowest level in six months. The Brexit negotiations are in full gear, but the sides have not been able to thrash out a deal, and the pound took it on the chin this week as a result.
Eurozone GDP rebounded 12.5% in Q3, just shy of the forecast of 12.6%. At its final policy meeting of the year, the ECB maintained its main interest rate at 0.00% but implemented further easing. The bank increased its pandemic recovery fund by EUR500 billion, to a total of EUR1.85 trillion. German CPI fell by 0.8%, its fourth decline in five months.
The BoC delivered a message of “more of the same” at its monthly policy meeting. The bank kept rates at 0.25% and made no change to QE. Bank members hinted that rates would remain in ultra-low territory until the economy picked up. This stance means that we could see these rate levels for the next 2-3 years.
- UK Employment Report: Tuesday, 7:00. Wage growth has been steadily improving and posted a gain of 1.3% in September, its first gain in five months. The upswing is expected to continue in October, with an estimate of 2.2%. Claimant Count fell by 29.8 thousand in October but is expected to rise by 10.5 thousand in November. The unemployment rate is forecast to rise to 5.2%, up from 4.8%.
- French Final CPI: Tuesday, 7:45. Inflation remains very low in the eurozone. The second-largest economy in the bloc has not posted a gain in inflation in four months. The estimate for November stands at 0.2%.
- UK inflation Report: Wednesday, 7:00. Inflation has been moving higher and reached 0.7% in October. The estimate for November is 0.6%. The core reading is expected at 1.4%, little changed from the previous read of 1.5%.
- FOMC Meeting: Wednesday, 19:00. The Federal Reserve could keep a low profile at the final policy meeting of the year. No change is expected to interest rate levels, which are at the ultra-low level of 0.25%. Investors will be scanning the rate statement, which could provide insights into the Fed’s view of the US economy.
- Eurozone Inflation Report: Thursday, 10:00. The specter of deflation remains a major headache for eurozone policymakers. Headline inflation has fallen by 0.3% for the two past months, and an identical drop is projected in November. Core inflation has been in positive territory, and is expected to post a gain of 0.2% for a third successive month.
- BoE Rate Decision: Thursday, 12:00. The last policy meeting of the year could be a quiet one for the BoE. Policymakers are expected to keep the Official Bank Rate at 0.10% and maintain the current level of QE at GBP895 billion.
- Canada ADP Non-Farm Employment Change: Thursday, 13:30. Canada’s labor market has shown some strong gains in job creation, but the ADP report has registered three straight declines. Will we see a reading in positive territory in the November release?
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