Economic calendar: Central banks to dominate the day

Summary:

• Riksbank expected to stay on hold but the likelihood points to some uncertainty over the decision

• Bank of England won’t change interest rates but could address Brexit in its statement

• UK retail sales for November likely to bounce after the disappointing October’s reading

8:30 am GMT - Riksbank’s decision: The last time when the Swedish central bank did rise interest rates was 2011. Since then many rate cuts took place. However, we are slowly coming to the onset of monetary tightening. In theory, it could occur even at today’s meeting but it is unlikely. The market-based probability suggests more than 35% chance to see such a move today signaling that the Swedish krona could be volatile. Nevertheless, it’s more likely than the Riksbank will want to outline the monetary policy outlook for the next year without specifying the date when a rate hike could take place. Indeed, the central bank has no too many reasons to begin raising rates. On the other hand, rates in Sweden are much lower than in Norway and if the Riksbank stays with rates on hold it could miss out on an opportunity to tighten policy before the Fed begins mulling over rate cuts.

9:30 am GMT - UK’s retail sales: Macroeconomic readings have been a bit less important in recent months as the Brexit thread has drawn market participants’ attention altogether. Having the BoE meeting today on the agenda one may suppose that retail sales will not be so important as usual. Headline retail sales ought to show a 1.9% YoY rise and a 0.3% MoM rise.  

12:00 pm GMT - Bank of England’s decision: In recent weeks the Bank of England sketched out a vision for the British economy if it crashes out of the European Union without an agreement. Therefore, this topic is likely to be brought up is the BoE’s statement. The main rate is obviously expected to stay at the current level. Along with the decision the minutes will be released as well.

12:00 pm GMT - Czech National Bank’s decision: At its final meeting the CNB is slated to stay on hold leaving the main rate at 1.75%. The bank has delivered as much as 5 rate hikes so far this year lifting the two-week repo rate from 0.5% to 1.75%.

1:30 pm GMT - US jobless claims: The consensus suggest that a number of jobless claims was 216k in the past week following a remarkably good number (206k) seen in the prior week.