Economic calendar: Attention paid to the US

Summary:

• The Fed will conclude its final meeting this year, no changes are expected
• US headline CPI likely to have quickened a bit in November
• Swedish CPI will be crucial for Riksbank planning to raise rates next week

8:30 am GMT - Swedish CPI for November: Undoubtedly, it is going to be one of the most important inflation prints from Sweden in recent years as it may weigh on a Riksbank’s decision on whether to say “yes” to a rate hike next week. The consensus is pointing to a slight acceleration in the case of headline CPI to 1.7% YoY from 1.6% YoY a month earlier. At the same time, core CPI, stripping out energy prices, is forecast to have remained unchanged at 1.7% in annual terms. Given the upcoming Riksbank’s rate decision, today’s release could substantially affect the SEK. 

1:30 pm GMT - US CPI for November: After a healthy rebound in core prices we have seen since the second half of the year, the pace of core price growth has decelerated of late and is estimated to have remained unchanged (2.3% YoY) in November as well. On the other hand, the consensus suggests a jump to 2% from 1.8% YoY in terms of headline CPI. Anyway, taking into account the current Fed’s reaction function it seems very unlikely to the US central bank may again decide to cut rates unless inflation is persistently running above the target. 

7:00 pm GMT - Fed’s rate decision: There will be the final say from the Federal Reserve this year and market expectations suggest that not much should happen. Either way, we will also be offered a new set of economic projections which should shed more light on whether the Fed forecasts a significant slowdown for 2020. Apart from that, market participants’ attention could be again paid to the repo thread after clear oversubscription of a term repo operation on Monday.