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The main data events Wednesday include Italian consumer and business climate indicators at 0900GMT, followed by US personal income and initial jobless claims, both released at 1330GMT.
Italian consumer confidence seen marginally lower
Consumer and manufacturing sentiment are both expected to remain broadly unchanged in December following a decline in November. Infection rates continue to remain elevated across the peninsula, despite the tightened measures, hence the situation has not significantly changed in December compared to November. Business sentiment fell sharply in November to 82.8, down from 92.2 seen in October. Markets expect consumer sentiment to ease marginally by 0.1pt to 98, while manufacturing sentiment is seen 0.3pt higher at 90.5. Both consumer and manufacturing confidence remain well below February's pre-crisis level. Looking ahead, the rollout of the vaccines should provide a boost in the coming months.
US personal income forecast to decrease
Personal income in the US is set to decline again in November, with Bloomberg forecasting a 0.2% decline following a 0.7% decrease in October. Retail sales in November fell by more expected, suggesting weak personal spending with markets looking for a 0.2% drop. Renewed business restrictions in some areas due to surging Covid-19 cases, hospitalizations, and deaths in November could have also curtailed some spending.
US jobless claims expected to slow
U.S. initial jobless claims filed through December 19 are expected to reach 863,000, slightly lower than the 885,000 claims filed through December 12.
Unemployed Americans continue to rely on special UI programs established under the CARES Act, with 455,037 Pandemic Unemployment Assistance claims filed through December 12, the Labor Department reported last week. That program, extending benefits to independent contractors and the self-employed, expires at the end of the month, along with the Pandemic Emergency Unemployment Compensation program.
There are no speeches scheduled for the rest of the week as policymakers head to their homes for a (scocially-distanced) Christmas break.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.