The Week Ahead – Capitol Hill, Brexit, and Vaccine updates and the FDA in Focus

On the Macro

It’s a particularly busy week ahead on the economic calendar, with 54 stats are in focus in the week ending 11^th December. In the week prior, 82 stats had also been in focus.

For the Dollar:

It’s a relatively busy week ahead on the economic data front.

3^rd quarter nonfarm productivity, unit labor costs, and October JOLTs job openings are in focus.

Barring marked revisions from prelim numbers, the JOLTs job openings will have the greatest impact. Weak numbers will raise yet more flags, as concerns over the labor market recovery linger.

On Thursday, the focus shifts to November inflation and weekly jobless claims figures. Expect the jobless claims to have the greatest impact.

November wholesale inflation and prelim consumer sentiment figures for December wrap things up on Friday.

Away from the economic calendar, the markets will be monitoring COVID-19 news updates and chatter from Capitol Hill.

The Dollar could take a double hit should the FDA approve Pfizer Inc.’s vaccine and lawmakers make progress in stimulus talks.

The Dollar Spot Index ended the week down by 1.19% to 90.701.

For the EUR:

It’s a busy week ahead on the economic data front.

In the 1^st half of the week, the German economy is in the spotlight.

October industrial production and trade figures and ZEW Economic Sentiment numbers for December are due out.

Market sensitivity to the numbers will largely depend on COVID-19 vaccine news updates.

The focus will then shift to the ECB monetary policy decision on Thursday. Lagarde had assured of further support in recent weeks. An increase to its bond purchasing program is expected, whether there will be further moves remains to be seen.

Fresh economic projections will also provide the markets with a guide of what to expect going into 2021.

Other stats in the week will likely have a muted impact on the EUR and the European equity markets. These stats include finalized Eurozone GDP and economic sentiment figures and finalized inflation figures for Germany and Spain.

Away from the economic calendar, COVID-19 news updates will remain a key driver in the week. Expect Brexit to also influence…

The EUR ended the week up by 1.32% to $1.2121.

For the Pound:

It’s a busier week ahead on the economic calendar.

In the 1^st half of the week, house price and retail sales figures are due out on Monday and Tuesday. Expect November’s BRC Retail Sales figures to draw the greatest interest.

With a lack of stats mid-week, the focus will then shift to a busy Thursday.

Key stats include trade data, industrial and manufacturing production figures for October, and GDP numbers.

Expect the manufacturing production and GDP numbers to have the greatest impact on the day.

Away from the economic calendar, Brexit and COVID-19 will remain the key drivers in the week.

The Pound ended the week up by 0.98% to $1.3441.

For the Loonie:

It’s a quiet but important week ahead on the economic calendar.

On the economic data front, November’s Ivey PMI, due out on Monday, is the only stat to consider.

Any significant decline would test support for the Loonie.

On Wednesday, however, the BoC is in action. The markets are expecting the BoC to stand pat. Progress towards a COVID-19 vaccine has supported riskier assets and crude oil prices.

Hopes of an economic rebound going into 2021 will likely allow the BoC to stand pat.

Away from the calendar, COVID-19 vaccine news, stimulus talk from Capitol Hill, and stats from China will also influence.

The Loonie ended the week up by 1.58% to C$1.2784 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week ahead on the economic calendar.

Business and Consumer confidence figures due out on Tuesday and Wednesday will provide direction.

From elsewhere, trade data from China will also influence.

Away from the economic calendar, COVID-19 news will continue to influence. U.S politics could also play a role should lawmakers make progress towards a stimulus package.

The Aussie Dollar ended the week up by 0.51% to $0.7425.

For the Kiwi Dollar:

It’s a relatively quiet week ahead on the economic calendar.

Electronic card retail sales and Business PMI numbers for November are due out in the week.

While the stats will influence, trade data from China and COVID-19 news updates will likely remain key drivers.

The Kiwi Dollar ended the week up by 0.30% to $0.7048.

For the Japanese Yen:

It is a relatively busy week on the economic calendar.

Household spending and current account figures for October and finalized 3^rd quarter GDP numbers are due out on Tuesday.

Barring marked revisions to the GDP numbers, household spending will garner the greatest interest.

At the end of the week, the BSI Large Manufacturing Conditions Index for the 4^th quarter will also draw attention.

Over the course of the week, however, COVID-19 vaccine news will likely mute the impact of any weak data.

The Japanese Yen ended the week down by 0.08% to ¥104.17 against the U.S Dollar.

Out of China

It’s another relatively busy week ahead on the economic data front.

On Tuesday, November trade figures will draw plenty of interest ahead of inflation figures on Wednesday.

Biden’s plans to retain the phase 1 trade agreement with China will increase the focus on the trade data.

The Chinese Yuan ended the week up by 0.71% to CNY6.5316 against the U.S Dollar.

Geo-Politics

U.S Politics

At the end of last week, talks of progress towards a COVID-19 stimulus package supported riskier assets.

Progress will need to be made in the week ahead, however, to prevent a pullback following last week’s payroll figures.

In the week ahead, the FDA is also in focus. Reviews of BioNTech/Pfizer Inc. and Moderna Inc.’s vaccines are scheduled.

While approvals are expected, production numbers and delivery timelines will be key.

Brexit

For the Pound and the UK economy, Brexit remains the key driver, as talks resumed last week. Going into this weekend, EU negotiators talked of progress being made. In contrast, however, Britain’s negotiators talked of issues remaining.

Updates from this weekend will have a material impact on the Pound as the markets eye this coming week’s EU Summit.