USD

After U.S. regulators voted to approve the Pfizer-BioNTech vaccine last Friday, the first vaccinations are set to start as early as Monday, starting with President Donald Trump and top officials. At the same time, talks of a new support package and the federal budget continue. Market participants are still hopeful that an agreement will be reached in the near-term, but parties and the White House are still some way from each other. It’s a busy week ahead in the U.S with several key releases to watch out for. The release of retail sales, industrial production, and flash PMI data will help survey the US economic landscape, whilst news from the final Fed meeting of 2020 will give insights into monetary policy as virus cases and restrictions rise once again. Key figures coming up:

• On Tuesday (12/15): Import and export prices | Industrial production/manufacturing output (Nov)
• On Wednesday (12/16): Flash PMI (Dec) | MBA mortgage applications (Dec 11 week) | Retail sales (Nov) | FOMC meeting (plus press conference) | Business inventories (Oct)
• On Thursday (12/17): Building permits, housing starts (Nov) | Jobless claims (Dec 11 week)
• On Friday (12/18): Current account (Q3)

EUR

In Europe, the intense talks on the EU budget and stimulus package finally ended in a historic agreement after Hungary and Poland lifted their veto, paving the way for another round of monetary stimulus next year with a forward-looking, digital, and green agenda. As rising manufacturing production was offset by falling services activity last month, this week’s flash Eurozone PMI provides an opportunity to assess whether these trends continued into December. Key figures coming up:

• On Monday (12/14): Eurozone industrial production/manufacturing output (Oct)
• On Wednesday (12/16): Germany flash PMI (Dec) | France flash PMI (Dec) | Eurozone flash PMI (Dec)
• On Thursday (12/17): Eurozone consumer prices (Nov)
• On Friday (12/18): Germany producer prices (Nov)

GBP

The European Union and the U.K. agreed to keep trade deal negotiations going beyond the latest deadline of Sunday. With 97% of a deal agreed upon, neither PM Boris Johnson nor European Commission President Ursula von der Leyen wants to be responsible for walking away from the Brexit talks. However, all back and forth over the prospect of a deal continue to infuse volatility into the FX market. The annual volatility in the GBP/USD pair stands at almost 11%, the highest value amongst the major currencies. Key figures coming up:

• On Tuesday (12/15): Employment, unemployment, earnings (Oct)
• On Wednesday (12/16): Consumer prices (Nov) | Producer prices (Nov) | UK flash PMI (Dec)
• On Thursday (12/17): Bank of England MPC meeting
• On Friday (12/18): Retail sales (Nov)

JPY

Japan kicked it off on Sunday night with the Q4 Tankan survey, which showed that the Large manufacturers index has improved for the second straight quarter, and hits its best since March 2020. In general, the sharp rebound in the Q4 Tankan supports the market’s view that the economy will rebound relatively promptly from the dislocation caused by the Covid-19 pandemic. Following, au Jibun gauges arrive on Wednesday and will help survey the Japanese economic landscape. The Bank of Japan is expected to hold its benchmark interest rate on Friday as it has been engaged in fighting deflation. Key figures coming up:

• On Monday (12/14): Industrial production/manufacturing output (Oct)
• On Tuesday (12/15): Trade balance (Nov) | Imports and Exports (Nov)
• On Wednesday (12/16): au Jibun Bank flash PMI (Dec)
• On Thursday (12/17): Consumer Price Index (Nov)
• On Friday (12/18): Central bank policy decision

CAD

Public Health Agency of Canada has also approved the Pfizer vaccine and plans to begin rollout this week, as it continues to post record levels of infection from the Covid-19 pandemic ahead of Christmas. The Canadian releases include manufacturing sales and housing starts data on Tuesday, with manufacturing likely to report a further decent gain while housing starts might be a touch cooler. Retail sales data to close the week should show no gain in October, frustrated by autos. Key figures coming up:

• On Tuesday (12/15): Manufacturing sales (Oct) | BoC Gov Council Member Macklem Speaks | Housing starts (Nov)
• On Wednesday (12/16): Consumer Price Index (Nov) | Wholesale Sales (Oct)
• On Thursday (12/17): ADP Nonfarm Employment (Nov)
• On Friday (12/18): Retail sales (Oct)

MXN

About one month ago, in a split 4-1 decision to hold the interest rate, one member opted for a cut to 4.0%, and the statement and subsequent minutes noted that they hold should be seen as a “pause” for the Central Bank’s Board to confirm that inflation is indeed converging over time to its 3% year-over-year target. In data released last Wednesday, headline annual inflation came in 3.41% year-over-year in November. Thus, Mexico’s Central Bank is not expected to alter policy on Thursday, keeping its benchmark policy rate on hold at 4.25% this week. Key figures coming up:

• On Thursday (12/17): Central bank rate decision

CNY

Last week, further sanctions on China officials and two of China’s biggest telecoms players by the U.S have continued to muddy the waters. That will remain as a pain point for the U.S-China relationship and should weigh on the Chinese yuan and stocks during the upcoming week. The Chinese economy is in focus with key official data such as industrial production and retail sales for November. The releases follow news from the Caixin PMI that business activity grew in China during November at the fastest rate for over ten years. Key figures coming up:

• On Monday (12/14): House price index (Nov)
• On Tuesday (12/15): Industrial production (Nov) | Retail sales (Nov) | Fixed asset investment (Nov) | Chinese Unemployment Rate

BRL

After several weeks in which the number of Covid-19 cases had been cooling, new infection numbers are again worryingly high in Brazil. The seven-day moving average of daily new positive tests remains elevated in Brazil (nearly 42,000). Brazil’s Central Bank held its benchmark interest rate (Selic) at 2% but noted that the conditions for its forward guidance may be ending as inflation remains persistently in the top half of their target. The week kicks off with the IBC-Br Economic Activity index, which reflects the preliminary gross domestic product data. Following this, the service sector growth gauge arrives on Wednesday and will help to ratify the Services PMI data from December, 03. Key figures coming up:

• On Monday (12/14): IBC-Br Economic Activity (Oct)
• On Tuesday (12/15): BCB Monetary Policy Committee (Copom) Meeting Minutes 
• On Wednesday (12/16): Service Sector Growth (Nov)
• On Friday (12/18): Current Account (USD) (Nov) | Foreign direct investment (USD) (Nov)