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1. Tuesday 13 December: UK inflation figures
Inflation has begun to creep higher, stoked by a lower pound and higher oil and fuel prices. Unilever, Microsoft and Apple are just three firms to have talked about price increases, while even New Zealand wine producers are now saying prices will have to rise.
NIESR expects inflation to reach 4% at some stage in 2017, although the OBR and Bank of England are less aggressive.
The key may be to look beyond the headline CPI and RPI numbers and look at producer prices (input and output) as these may give an indication of what is coming down the food chain.
In October
- CPI inflation was 0.9% (“core” CPI was 1.2%)
- RPI inflation was 2.0%
- PPI inflation (input – raw materials) was 12.2%
- PPI (output – finished goods) was 2.1%
2. Wednesday 14 December: interest rate decision from the US Federal Reserve
The market is putting a 100% chance on a 0.25% rate hike from the US Federal Reserve, to 0.75%
This would be the first increase of 2016 and the second of this rate hike cycle after last December’s 0.25% move
Of greater interest may be the “dot plot” and Fed forecasts for rate hikes in 2017 – last December it forecast four rate hikes and delivered one (assuming it moves this week)
The market is currently pricing in one or two 0.25% increases in 2017, the first in June or July.
3. Thursday 15 December: interest rate decision from the Bank of England
In marked contrast to the Federal Reserve the Bank of England is not expected to alter monetary policy after the latest meeting of the Monetary Policy Committee.
This would leave interest rates at 0.25% and QE at £445 billion after August’s £70 billion increase
It will be interesting to see if the MPC vote is a 9-0 unanimous one and if the MPC hints at whether it will extend or let the £70 billion Gilt scheme end on completion
Other news items to watch:
Monday 12 December
Latest monthly fixed asset investment, retail sales and industrial output numbers from China
Tuesday 13 December
First-quarter trading statement from FTSE 250 house builder Bellway
Interim results from retailer Carpetright
German monthly ZEW industrial confidence indicator
US monthly NFIB smaller companies confidence indicator
Wednesday 14 December
Interim results from retailer Dixons Carphone
Interim results from FTSE 100 tech stock Micro Focus (in the process of doing a huge merger deal with Hewlett Packard Enterprises)
Trading statement from FTSE 250 oil services and equipment group Wood
Full-year results from Hollywood Bowl
UK unemployment numbers for November
US weekly oil inventories
Thursday 15 December
Trading statement from FTSE 100 utility Centrica (the owner of British Gas)
Trading statement from transport group Go-Ahead (in the firing line, as its Govia subsidiary runs Southern Rail)
Latest interest rate decision from the Swiss National Bank
US monthly inflation figures
US monthly industrial sentiment surveys – Philadelphia Fed and Empire State
Friday 16 December
Bank of England Quarterly Bulletin
US monthly new housing permits and new housing starts data