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MNI GLOBAL WEEK AHEAD - BoJ Decision, UK CPI and EM CBs

TUESDAY: BOJ DECISION

While certain investors interpreted recent statements from Bank of Japan (BOJ) officials regarding exit scenarios as a sign of an imminent shift away from yield curve control, we are inclined to view it as a strategic step in the extended process of preparing for a seamless transition, likely occurring around mid-year next year. Consequently, we anticipate the BOJ to maintain its current stance, including at the upcoming meeting next week, which marks the last for 2023. Regarding the Negative Interest Rate Policy (NIRP), we anticipate the BOJ to maintain its short-term rate at -0.1% next week but with the expectation for it to end in 2024. This outlook is in line with the latest Reuters poll, where 84% of surveyed economists anticipate the BOJ to cease NIRP in 2024, compared to 71% in the November poll and 54% in October.

TUESDAY: EUROZONE NOVEMBER FINAL HICP

Eurozone final HICP for November is released on Tuesday, including the full breakdown of COICOP sub-components. The flash estimate printed at an unrounded +2.41% (vs +2.7% cons; +2.90% prior), the first time the headline has been below 2.5% since July 2021. Disinflation was seen in both core goods and services components, with one area interest being the extent to which travel components pulled down the services print (due to the high weighting of German package holidays). We will also focus our attention on the extent to which inflation breadth (measured as the % of 4-digit COICOP sub-components that have Y/Y inflation rates above 2%) improved in November, alongside the release of the ECB's underlying inflation measures (e.g. PCCI).

TUESDAY: LATAM CENTRAL BANKS

Analysts remain evenly split over whether Colombia’s central bank (Tue) will keep rates unchanged at 13.25% or initiate the easing cycle with a 25bp rate cut. In Chile, the BCCh (Tue) will likely deliver another 50bp rate cut to 8.50%. Higher-than-expected November inflation data has curtailed expectations for bolder easing at this juncture.

TUESDAY/THURSDAY: CEEMEA CENTRAL BANKS

The NBH (Tue) is expected to deliver another 75bp rate cut in December, taking the base rate to 10.75%. This follows comments from Deputy Governor Virag last month who said that the base rate could drop to below 10% by February, implying 75bp cuts in each of the December and January meetings at least.

In Turkey, the CBRT (Thu) is widely expected to deliver another rate hike, though the scale of such an increase is expected to be moderated following three consecutive 500bp hikes. A smaller 250bp move is the overwhelming consensus among sell-side, which would take the year-end one-week repo rate to 42.50% from just 9.00% in January.

WEDNESDAY: UK NOVEMBER CPI

UK November CPI is released on Wednesday, with current consensus looking for headline CPI at 4.3% Y/Y (vs 4.6% prior) and core at 5.5% Y/Y (vs 5.7% prior). In its December meeting policy statement, the BoE noted that "CPI inflation is expected to remain near to its current rate around the turn of the year". Services inflation is seen stable at 6.6% Y/Y, though a temporary increase is expected in January due to base effects from "unusually weak price movements at the start of" 2023. Services inflation remains one of the three key metrics that the BoE is tracking to determine inflation persistence, so further falls in this measure will be a necessary condition for the BoE to entertain rate cuts in the near future.

FRIDAY: JAPAN CPI

November Japan nationwide CPI is expected to lose further momentum in y/y terms. The headline is forecast at 2.47% y/y, versus 3.3% prior. Ex Fresh food is projected at 2.5%y/y, while the measure that also strips out energy is projected at 3.8% y/y. Both measures are expected to show slower momentum relative to October. We have seen continued downside pressure in the Japan PPI, which in y/y terms is also back to flat. Also note Tokyo November CPI prints came in below estimates and continued to show moderating y/y momentum (back to 2.6% y/y for the headline).

DateGMT/LocalImpactFlagCountryEvent
18/12/20230900/1000***DE IFO Business Climate Index
18/12/20231030/1030UK BOE's Broadbent speech at London Business School
18/12/20231330/1430EU ECB Schnabel Lectures On EU Fiscal Policy And Governance
18/12/20231500/1000**US NAHB Home Builder Index
18/12/20231500/1600EU ECB Lane Chairs Panel on EMU Reforms
18/12/20231630/1130*US US Treasury Auction Result for 13 Week Bill
18/12/20231630/1130*US US Treasury Auction Result for 26 Week Bill
19/12/20230300/1200***JP BOJ policy announcement
19/12/20230900/1000EU ECB Elderson Statement On Banking Risks and Priorities
19/12/20231000/1100***EU HICP (f)
19/12/20231000/1000**UK Gilt Outright Auction Result
19/12/20231300/1300UK BOE Breeden Speech At IIF Policy Series
19/12/20231330/0830***CA CPI
19/12/20231330/0830*CA Industrial Product and Raw Material Price Index
19/12/20231330/0830***US Housing Starts
19/12/20231355/0855**US Redbook Retail Sales Index
19/12/20231630/1130*US US Treasury Auction Result for Cash Management Bill
19/12/20231730/1230US Atlanta Fed's Raphael Bostic
20/12/20230001/0001*UK XpertHR pay deals for whole economy
20/12/20230700/0800**DE PPI
20/12/20230700/0800*DE GFK Consumer Climate
20/12/20230700/0700***UK Consumer inflation report
20/12/20230700/0700***UK Producer Prices
20/12/20230700/1500**CN MNI China Liquidity Index (CLI)
20/12/20230900/1000**EU EZ Current Account
20/12/20231000/1100**EU Construction Production
20/12/20231200/0700**US MBA Weekly Applications Index
20/12/20231330/0830*US Current Account Balance
20/12/20231400/1500EU ECB Lane Speech On Euro Area Outlook
20/12/20231500/1000***US NAR existing home sales
20/12/20231500/1000***US Conference Board Consumer Confidence
20/12/20231500/1600**EU Consumer Confidence Indicator (p)
20/12/20231530/1030**US DOE Weekly Crude Oil Stocks
20/12/20231800/1300**US US Treasury Auction Result for 20 Year Bond
20/12/20231830/1330CA BOC minutes from last rate meeting
21/12/20230700/0700***UK Public Sector Finances
21/12/20230745/0845**FR Manufacturing Sentiment
21/12/20230800/0900**SE Economic Tendency Indicator
21/12/20230900/1000**IT PPI
21/12/20231100/0600***TR Turkey Benchmark Rate
21/12/20231330/0830***US Jobless Claims
21/12/20231330/0830**US WASDE Weekly Import/Export
21/12/20231330/0830*CA Payroll employment
21/12/20231330/0830**CA Retail Trade
21/12/20231330/0830***US GDP
21/12/20231330/0830**US Philadelphia Fed Manufacturing Index
21/12/20231530/1030**US Natural Gas Stocks
21/12/20231600/1100**US Kansas City Fed Manufacturing Index
21/12/20231600/1700EU ECB Lane Participates In Workshop Panel
21/12/20231800/1300**US US Treasury Auction Result for TIPS 5 Year Note
22/12/20232330/0830***JP CPI
22/12/20230700/0700***UK Retail Sales
22/12/20230700/0800**SE Retail Sales
22/12/20230700/0800**SE PPI
22/12/20230700/0700***UK GDP Second Estimate
22/12/20230700/0700*UK Quarterly current account balance
22/12/20230745/0845**FR Consumer Sentiment
22/12/20230745/0845**FR PPI
22/12/20230800/0900***ES GDP (f)
22/12/20230900/1000**IT ISTAT Business Confidence
22/12/20230900/1000**IT ISTAT Consumer Confidence
22/12/2023-UK Publication of the Treasury Bill Calendar for January - March 2024
22/12/20231330/0830***CA Gross Domestic Product by Industry
22/12/20231330/0830**US Durable Goods New Orders
22/12/20231330/0830**US Personal Income and Consumption
22/12/20231400/1500**BE BNB Business Sentiment
22/12/20231500/1000***US New Home Sales
22/12/20231500/1000**US U. Mich. Survey of Consumers
22/12/20231800/1300**US Baker Hughes Rig Count Overview - Weekly

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