This week, financial markets are keenly anticipating the Federal Reserve's policy meeting and the release of the Fed's economic projections. Additionally, there are expectations for interest rate decisions in both Britain and Europe, which are crucial events not to be missed. These developments could impact various assets and trigger volatility, including movements in the US Dollar and stock markets.
Here are five economic events that could affect your portfolio this week.
🇺🇸 November’s CPI and Core CPI
The week kicks off with the release of November’s Consumer Price Index (CPI) and Core CPI in the United States. These key economic indicators are scheduled for release on Tuesday, December 12th, at 15:30 GMT+2. The CPI measures the average change over time in the prices paid by consumers for a basket of goods and services, while the Core CPI excludes volatile food and energy prices to provide a clearer view of the inflation trend.
Both indicators are forecasted to show a slight increase of 0.1%-0.2% compared to the previous month's figures. These releases are particularly significant as they offer insights into inflation trends, which are a crucial factor in shaping monetary policy decisions. The impact of these data points is likely to be felt most acutely in the forex and stock markets, with potential volatility expected in pairs like $EURUSD, as well as in major indices such as Nasdaq, Dow Jones, and SPX500.
🇬🇧 GDP m/m
The next notable release of the week is the British Gross Domestic Product (GDP) month-over-month, scheduled for Wednesday, December 13th, at 9:00 GMT+2. This key economic indicator measures the change in the value of all goods and services produced by the economy and is a primary gauge of economic health. For this release, the GDP is anticipated to show no change, maintaining the same level as the previous month, when it had recorded a 0.2% increase.
This stability in the GDP could lead to volatility in the forex market, particularly impacting the $GBPUSD currency pair. Additionally, the release may influence the stock market, affecting the shares of British companies.
🇺🇸 Fed Interest Rate Decision
On the evening of Wednesday, December 13th, the most significant event of the week will take place: the Federal Reserve Interest Rate Decision, scheduled for 21:30 GMT+2. The current interest rate stands at 5.50%, and in this upcoming decision, it is expected to remain unchanged. An increase of 0.25% is considered unlikely.
The Fed's decision on interest rates is always a highly anticipated event, as it directly influences monetary policy and has wide-reaching implications for financial markets. Any change, or even the lack of change, can stir significant market activity. Traders and investors will be especially alert, ready to react to any outcome of this announcement. The decision could induce notable fluctuations in the stock and bond markets, as well as in the forex market, particularly impacting currency pairs like $EURUSD and $USDJPY.
🇬🇧 BoE Interest Rate Decision
The next key release is the Bank of England (BoE) Interest Rate Decision, scheduled for Thursday, December 14th, at 14:00 GMT+2. The current interest rate set by the BoE is 5.25%, and it is widely anticipated that there will be no change in this rate during this announcement. This decision is crucial as it reflects the central bank's view on the UK economy and influences monetary policy. A steady rate is indicative of the bank's assessment of economic conditions and its strategy for achieving stable growth and inflation.
🇪🇺 ECB Interest Rate Decision
The final major event of the week is the European Central Bank (ECB) Interest Rate Decision, which is set to occur on the same day, Thursday, December 14th, at 15:15 GMT+2. This decision is a pivotal moment for the European financial markets, as it provides insight into the ECB's view on the Eurozone's economic health and its monetary policy going forward.
Investors and traders keenly watch the interest rate decision by the ECB, as it can have a significant impact on the Eurozone's financial markets, including the performance of the Euro in the forex markets and the movement of European stocks and bonds.
That's it for this week! 👋
