The Economic Week Ahead

Main Macro Events This Week

United States: Consumer credit is expected to rise $17.0 bln in October (today), fluttering back down to earth from its explosion to a record $28.9 bln in September. Yellen’s favorite JOLTS job openings for October are due (Tuesday). The MBA mortgage report and EIA inventories are on tap (Wednesday) along with wholesale sales expected to rise 0.5% in October (median 0.3%) vs 0.5% and inventories seen -0.1%. Import prices will remain soft thanks in large part to oil and are forecast to sink 0.7% in November (Thursday), while export prices may falter 0.3%. In addition, initial jobless claims are set to ease 1k to 268k, while the Treasury budget may narrow to -$67.0 bln in November from -$136.5 bln. While we forecast a 0.4% rise in November retail sales (Friday), and 0.3% ex-autos, the tragic events in Paris may have slowed some mall traffic over the Thanksgiving break according to informed sources. PPI is set to rise just 0.1% in November, both headline and core. Preliminary Michigan sentiment may rise to 91.8 in December from 91.3 final in November. Business inventories are seen unchanged.

Canada: a narrow batch of economic data during the week, with only housing releases and capacity utilization on the docket. Capacity utilization (Thursday) is expected to improve to 82.0% in Q3 from 81.3% in Q2 as growth returned in Q3 after the contraction in the economy during Q1 and Q2. Housing starts are expected to firm slightly to a 200.0k unit annual growth rate in November from the 198.1k clip in October, as robust growth in some regions (Vancouver, Toronto) more than offsets sluggishness in regions dependent on the resource extraction industries. Housing permits (Tuesday) are seen dipping 1.0% in October after the 6.7% tumble in September and 3.6% pull-back in August. 

Europe: The highlight is German Industrial Production data on (Tuesday), which after the stronger than expected rebound in manufacturing orders is expected to rise 1.5% m/m (med 0.8%), after falling 1.1% y/y in September. The final reading of Eurozone Q3 GDP (Tuesday), should confirm growth rates of 0.3% q/q and 1.6% y/y, with the breakdown expected to show that growth remains driven by consumption and domestic demand. French HICP is seen unchanged at 0.2% y/y (med same), but with overall EMU numbers already out, is unlikely to have much impact. The same holds for final German HICP, which is expected to be confirmed at 0.3% y/y, with the final Italian reading seen confirmed at 0.1% y/y. The Eurozone also has German trade numbers as well as French and Italian production numbers. Supply comes from Germany, which sells 2-year Schatz notes Wednesday. Spain and Italy sell bills. There are a number of ECB speakers, but with the December policy meeting out of the way, there is unlikely to be anything radically new. 

United Kingdom: The UK calendar is highlighted the December BoE policy meeting (Thursday), the latest BRC retail sales report and industrial production data for October (both Tuesday), and trade data (Thursday). Unlike the ECB last week, no drama is likely to come from the BoE meeting this week, assuming the FT doesn’t jump the gun again ahead of the decision, where a no-change announcement is widely anticipated to leave the repo rate at 0.5% and the QE total at GBP 375 bln. The minutes are likely to reveal a 8-1 vote, with McCafferty maintaining his dissent in favour of a 25 bp hike. As for data, the BRC is expected to rise 0.4% (median 0.5%), rebounding after dipping 0.2% m/m in October, aided by the UK’s version of Black Friday sales. Industrial production is expected at +0.1% m/m and +1.2% y/y (mediums same). Trade numbers are expected to show a mercantile deficit of GBP 9.6 bln, near to the average seen this year.

China: November trade data (Tuesday) is expected to reveal a $63.0 bln surplus, wider than the $61.6 bln in October. Export data will be closely eyed — they have contracted on an annual basis in 8 of the last 10 month. November CPI and PPI (Wednesday) are seen unchanged at 1.3% y/y for the former, and faling to a -6.0% y/y pace from 5.9% for the latter. November loan growth (Thursday) likely remained steady at 15.4% y/y, while November new yuan loans (due later in the week) are penciled in at CNY 700 bln, up from 513.6 bln in October. November industrial production and retail sales are scheduled for release next (Saturday), and are forecast unchanged at 5.6$ y/y for the former, and 10.9% y/y from 11.0% for the latter.

Australia: calendar is highlighted by employment (Thursday), expected to improve 10.0k in November after the surprisingly firm 58.6k gain in October. The unemployment rate is seen at 5.9% in November, matching October. Housing finance (Wednesday) is expected to improve 1.0% m/m in October after the 2.0% gain in September. A 0.2% m/m rise in ANZ job ads (today) is projected for November following the 0.4% rise in October. There is nothing from the RBA this week, but next week has the November meeting minutes.

Japan: In Japan, we forecast Q3 GDP (Tuesday) to be revised up to 0.1% q/q from the initial -0.8% outcome. The October current account surplus (Tuesday) is expected to narrow slightly to JPY 1,450.0 bln from JPY 1,468.4 bln, while October machine orders (Wednesday) are seen falling 3.0%, as compared to the 7.5% rise in September. November PPI (Thursday) likely slipped further to -3.9% y/y from the prior -3.8% outcome, and the September MoF business outlook survey (Thursday) is seen falling to 8.0 from the previous 9.6.