Forecasting the upcoming week: Focus will be on US ISM prints and PCE data

The US Dollar (USD) came under renewed downside pressure, partially eroding the previous week’s strong uptick, as investors continued to pencil in the likelihood that the Federal Reserve could lower its interest rates once again at its December 10 gathering.

The US Dollar Index (DXY) managed to regain some composure on Friday, although it ended the week with decent losses alongside declining US Treasury yields and steady bets for extra easing by the Fed. The ISM Manufacturing PMI takes centre stage on December 1, seconded by Construction Spending and the final S&P Global Manufacturing PMI. On December 2 comes the RCM/TIPP Economic Optimism Index and the API’s weekly report on US crude oil inventories. The usual weekly MBA Mortgage Applications are due on December 3, followed by the ADP Employment Change, Export/Import Prices, the ISM Services PMI, Industrial and Manufacturing Production, Capacity Utilisation, the final S&P Global Services PMI and the EIA’s weekly report on US crude oil stockpiles. The Challenger Job Cuts are expected on December 4, along with the weekly Initial Jobless Claims and Balance of Trade results. The publication of the PCE will wrap up the calendar on December 5 alongside Personal Income/Spending, the flash U-Mich Consumer Sentiment and Factory Orders.

Despite Friday’s pullback, EUR/USD clocked solid gains on the weekly chart, always underpinned by the persistent selling pressure on the Greenback. The final HCOB Manufacturing PMI in Germany and the eurozone will kickstart the weekly docket on December 1. The advanced Inflation Rate in the Euroland is due on December 2 along with the Unemployment Rate. The final HCOB Services PMI in Germany and the euro area will be released on December 3, seconded by Producer Prices in the region. The HCOB Construction PMI in Germany and the euro zone is due on December 4 ahead of EMU’s Retail Sales. German Factory Orders is expected on December 5, followed by EMU’s final Q3 Employment Change and the third estimate of the Q3 GDP Growth Rate.

Quite a robust performance lifted GBP/USD to fresh four-week highs near 1.3270, just to ease a tad afterwards and eventually end the week with strong gains. The final S&P Global Manufacturing PMI is due on December 1, ahead of Mortgage Approvals, Mortgage Lending and the BoE’s M4 Money Supply. The BRC Shop Price Inflation comes out on December 2 along with the Nationwide Housing Prices. The final S&P Global Services PMI is due on December 3, while the S&P Global Construction PMI and the BoE’s DMP survey will be published on December 4. Closing the UK docket, the BBA Mortgage Rate and the Halifax House Price Index are due on December 5.

USD/JPY ended the week almost unchanged after two consecutive advances, coming under renewed downside pressure after faltering just ahead of the 158.00 mark. Capital Spending figures and the final S&P Global Manufacturing PMI are due on December 1. The Consumer Confidence gauge comes on December 2, while the final S&P Global Services PMI is expected on December 3. The weekly Foreign Bond Investment prints will be released on December 4. The key Reuters Tankan Index, Current Account results, the final Q3 GDP Growth Rate, Bank Lending figures and the Eco Watchers Survey will wrap up the calendar on December 5.

A stellar week saw AUD/USD regain strong upside impulse and reclaim the 0.6500 barrier and well above, advancing for the sixth consecutive day on Friday. Business Inventories and Commodity Prices will come on December 1. Building Permits, the Current Account results, Private House Approvals, the Ai Group Industry and the final S&P Global Manufacturing PMI are expected on December 2. The release of Q3 GDP Growth Rate will take centre stage on December 3, while Balance of Trade results and Household Spending data will close the domestic docket on December 4.

Anticipating economic perspectives: Voices on the horizon

• The BoJ’s Ueda speaks on December 1.
• The Fed’s Powell and Bowman speak on December 2.
• The ECB’s Lagarde will speak on December 3 alongside the BoE’s Mann.
• The Fed’s Bowman is due to speak on December 4.

Central banks: Upcoming meetings to shape monetary policies

• The NBP will meet on December 3 (4.25% act. vs. 4.00% exp).
• The RBI will decide on rates on December 5 (5.50% act. vs. 5.25% exp.).