MNI Global Week Ahead December 14 - 18

Key Things to Watch:

• Wednesday, December 16 – U.S. Retail Sales
  • Retail sales are expected to fall 0.2% in November, according to Bloomberg, the first drop since April.
  • Increased business restrictions likely reduced mobility through the month, putting some downward pressure on gas station sales.
  • Excluding motor vehicle and gas station sales, retail sales should increase 0.2% in November, according to Bloomberg.
  • Sales at online stores surged through the month, which should at least partially offset weakness from restaurant sales, which suffered from new business shutdowns meant to curb the spread of the nation's Covid-19 outbreak.

• Wednesday, December 16 – FOMC Policy Meeting
  • The Fed is expected to hold its benchmark interest rate near zero and deliver forward guidance around QE, pledging to keep QE operating until certain economic outcomes are achieved.
  • Officials have hinted that shifting asset purchases toward the longer end of the yield curve is unlikely at this meeting, but additional easing will be debated as the labor market recovery falters amid record-setting coronavirus caseloads and deaths.
  • QE guidance will imply that asset purchases would taper and cease sometime before rates lift off zero, but the dot plot is expected to show no rate hikes through 2023 even as the medium term outlook improves with the distribution of vaccines next year.

• Thursday, December 17 – Bank of England Policy Meeting
  • The Bank of England meets Dec 17, the last meeting of the year that has seen policymakers slash interest rates to a record low 0.1%, and consider a move to negative rates and extend its stock of bond buying to a potential GBP845 billion.
• The December meeting falls just a fortnight ahead of the year-end, when we could still find the UK ending its transition out of the European Union without a future trade deal. Although the BOE is likely to stand pat on both rates and QE this month, Governor Andrew Bailey has said policymakers have enough in the armory to act if needed.