14thDecember 2023
Thursday
On Thursday,December 14, 2023, the financial markets are set to experience a day ofsignificant announcements globally. The series of key economic disclosures willcommence with Australia revealing its latest employment change figures and theunemployment rate. Following this, the Swiss National Bank is scheduled toannounce its policy rate decision. The focus will then shift to the UnitedKingdom, where the official bank rate will be declared. Subsequently, theEuropean Union will announce its main refinancing rate. In the United States,critical economic data such as core retail sales m/m, total retail sales m/m,and unemployment claims are due for release. The day’s series of announcementswill culminate with a press conference by the European Central Bank, marking aday full of potentially market-impacting news.AUD – Employment Change
Job creation, akey driver of consumer spending, significantly impacts overall economicactivity, as it influences the majority of consumer purchases and economicgrowth.
AustralianEmployment Soared Beyond Expectations in October: In a remarkable surge,Australia's employment figures for October 2023 outpaced market predictions,with a significant addition of 55,000 jobs, raising the total to 14.17 million.This performance, which was a marked acceleration from the 7,800 increase inSeptember, saw part-time employment jump by 37,900, while full-time jobsexperienced a growth of 17,000, indicating robust economic activity.
The forecast forthe upcoming Employment Change suggests a decrease to 25K, downfrom the previous outcome of 55K.
The upcoming EmploymentChange data is scheduled for release on Thursday, December 14, 2023, at12:30 AM GMT.
AUD – Unemployment Rate
Though typicallyconsidered a lagging indicator, the unemployment rate is a crucial indicator ofoverall economic health, as consumer spending closely aligns with labor marketconditions.
In October 2023,Australia's unemployment rate marginally increased to 3.7% amid a complex jobmarket, despite the addition of 55,000 jobs and a climb in the participationrate to 67.0%, reflecting a robust yet nuanced employment landscape.
The forecast forthe Unemployment Rate indicates it is expected to remain steady at 3.7%,unchanged from the previous figure.
The next releaseof Unemployment Rate data is scheduled for Thursday, December 14,2023, at 12:30 AM GMT.
CHF - SNB Policy Rate
Short-term interest rates are the primaryfactor in determining currency value, with traders typically analyzing otherindicators mainly to forecast future rate changes.
The SwissNational Bank (SNB) opted to keep the SNB policy rate steady at 1.75%,balancing inflation control with openness to further policy adjustments. Theycontinued to monitor inflation trends and participated in foreign exchangeinterventions as necessary. Interest on banks' sight deposits was determinedusing set thresholds. In August, inflation had fallen to 1.6%, mainly due toreduced costs of imported goods and services. The forecast projected an averageinflation rate of 2.2% for 2023 and 2024, dropping slightly to 1.9% by 2025.Meanwhile, global economic growth remained moderate, with central banksworldwide modifying their monetary policies in line with inflationary patterns.
TL;DR
Aspect
Details
1 SNB Policy Rate
Kept steady at 1.75%
2 Primary Objective
Balancing inflation control with openness to further policy adjustments
3 Monitoring
Inflation trends closely monitored
4 Intervention
Participation in foreign exchange interventions as necessary
5 Banks' Sight Deposits Interest
Determined using set thresholds
6 Inflation Rate (August)
Fell to 1.6%, mainly due to reduced costs of imported goods and services
7 Inflation Rate Forecast
Average of 2.2% for 2023 and 2024, decreasing to 1.9% by 2025
8 Global Economic Growth
Remains moderate
9 Actions of Other Central Banks
Modifying their monetary policies in line with inflationary patterns
The forecast forthe SNB Policy Rate suggests it will remain unchanged at 1.75%,consistent with the previous rate.
The next SNB PolicyRate announcement is scheduled for Thursday, December 14, 2023, at 8:30AM GMT.
CHF - SNB Press Conference
This tool is akey method for the SNB Governing Board to communicate with investors aboutmonetary policy and economic forecasts. Conferences, scheduled alongside rateannouncements in June and December, last about an hour and consist of twosegments: initial prepared statements followed by a press Q&A session,where unscripted responses can often lead to market volatility.
The SNB PressConference is scheduled for ThursdayDecember 14, 2023, at 09:00AM GMT.
GBP - Official Bank Rate
Tradersprimarily focus on short-term interest rates for currency valuation,considering other indicators mainly as tools to forecast future rate changes.
In its Novembermeeting, the Bank of England decided to keep its benchmark interest rate at a15-year peak of 5.25%, unchanged for the second time in a row, amid concernsover UK's slowing economy and high inflation. The 6-3 vote by the MonetaryPolicy Committee was against a proposed 25 basis points hike. The bank plans tocontinue its restrictive monetary policy to combat inflation, with apossibility of more tightening if necessary, while expecting modest economicgrowth in the near future.
The forecastsuggests that the Official Bank Rate will remain unchanged at 5.25%,consistent with the previous rate.
The upcoming OfficialBank Rate announcement is scheduled for Thursday, December 14th, at12:00 PM GMT.
EUR - Main Refinancing Rate
Short-term interest rates are the keydeterminant in currency valuation, with traders typically examining otherindicators primarily to anticipate future rate changes.
In its October meeting, the EuropeanCentral Bank (ECB) had opted to maintain interest rates at multi-year highs,marking a notable departure from its 15-month streak of continuous rate hikes.This decision reflected a more cautious approach among policymakers, influencedby the gradual easing of inflationary pressures and concerns regarding alooming economic downturn. Prior to this decision, the ECB had implemented tenconsecutive rate increases since July 2022, resulting in the main refinancingoperations rate reaching a 22-year peak at 4.5%, and the deposit facility ratehitting an all-time high of 4%. The central bank reaffirmed its commitment toachieving its 2% inflation target over the medium term, emphasizing itsreadiness to keep interest rates at these elevated levels for an extendedperiod until this goal was realized.
TL;DR
Aspect
Details
1 Decision on Interest Rates
Maintained at multi-year highs, breaking the 15-month streak of continuous rate hikes
2 Policy Shift
Shifted to a more cautious approach
3 Influence for Decision
Gradual easing of inflationary pressures and concerns about a looming economic downturn
4 Previous Rate Increases
Ten consecutive rate increases since July 2022
5 Current Rates
Main refinancing operations rate at a 22-year peak of 4.5%, deposit facility rate at an all-time high of 4%
6 Inflation Target
Reaffirmed commitment to achieving a 2% inflation target over the medium term
7 Outlook on Interest Rates
Prepared to maintain elevated interest rates for an extended period until the 2% inflation target is achieved
According to thelatest forecast, the Main Refinancing Rate is expected to remain steadyat 4.5%, unchanged from the previous announcement, as announced inrecent financial news.
The next MainRefinancing Rate announcement is scheduled for Thursday, December 14th,2023, at 1:15 PM GMT.
USD - Core Retail Sales m/m
Core RetailSales month-over-month figures are closely monitored by traders as they offerinsights into consumer spending, a major driver of economic expansion. Byexcluding the frequently fluctuating food and energy sectors, Core Retail Salespresent a more reliable measure of underlying trends in consumer expenditure.
In October 2023,U.S. Retail Sales excluding motor vehicles and parts rose by 0.1%month-over-month, exceeding market expectations of a flat reading and followinga 0.8% increase in the previous month.
The forecast forthe upcoming Core Retail Sales m/m indicates a slight decrease to-0.1%, down from the previous figure of 0.1%.
The upcoming CoreRetail Sales m/m announcement is scheduled for Thursday, December 14th,2023, at 1:30 PM GMT.
USD - Retail Sales m/m
This measure isthe main indicator of consumer spending, which constitutes a significantportion of overall economic activity.
In October 2023,U.S. retail sales saw a 0.1% month-over-month decrease, ending a six-monthstreak of growth and performing better than the anticipated 0.3% decline. Keysectors experiencing downturns included miscellaneous store retailers (-1.7%),furniture stores (-2.0%), and motor vehicle dealers (-1.0%). However, gains inhealth and personal care stores (1.1%), food & beverage stores (0.6%), andelectronics and appliances stores (0.6%) partially offset these declines.Year-over-year, retail trade growth slowed to 2.5% in October, down fromSeptember's revised 4.1%.
TL;DR
Aspect
Details
1 Overall Change
0.1% month-over-month decrease, ending a six-month growth streak
2 Comparison to Expectations
Performed better than anticipated 0.3% decline
3 Sectors with Downturns
Miscellaneous store retailers (-1.7%), furniture stores (-2.0%), motor vehicle dealers (-1.0%)
4 Sectors with Gains
Health and personal care stores (1.1%), food & beverage stores (0.6%), electronics and appliances stores (0.6%)
5 Year-over-Year Growth (October)
Slowed to 2.5%, down from September's revised 4.1%
The forecast forthe US Retail Sales m/m is reading -0.1%, showing a reduction inthe sales of major retailer categories.
The upcoming RetailSales m/m announcement is scheduled for Thursday, December 14th, 2023,at 1:30 PM GMT.
USD - Unemployment Claims
Despite being considereda lagging indicator, the unemployment rate is a crucial measure of theeconomy's health as consumer spending is closely linked to labor marketconditions. Additionally, unemployment figures play a significant role inguiding the country's monetary policy decisions.
In the week ending December 2, 2023, theUnited States witnessed a slight uptick in Initial Jobless Claims, with thenumber rising to 220 thousand from the previous week's 219 thousand. This data,which tracks the number of individuals filing for unemployment benefits,demonstrates the ongoing fluctuations in the labor market. Over the decades,the average Initial Jobless Claims in the United States have stood at 365.95thousand, with notable historical highs and lows. The highest point reached wasa staggering 6137 thousand in April 2020, while the lowest recorded figure wasa mere 162 thousand in November 1968, reflecting the nation's ever-evolvingemployment landscape.
TL;DR
Aspect
Details
1 Current Data (Week Ending Dec 2)
220 thousand claims, a slight increase from the previous week's 219 thousand
2 Context
Tracks the number of individuals filing for unemployment benefits
3 Historical Average
Average Initial Jobless Claims: 365.95 thousand
4 Historical High
April 2020: 6137 thousand claims (highest point)
5 Historical Low
November 1968: 162 thousand claims (lowest point)
6 Significance
Reflects ongoing fluctuations and the evolving employment landscape in the United States
The forecast forUnemployment Claims suggests a rise to 227K, up from the previousfigure of 220K.
The release ofthe upcoming Unemployment Claims data is scheduled for Thursday,December 14, 2023, at 1:30 PM GMT.
EUR - ECB Press Conference
The primary waythe ECB communicates with investors about monetary policy is through thismethod. It thoroughly discusses factors influencing recent interest rate andpolicy decisions, including the economic outlook and inflation, andimportantly, offers insights into future monetary policy directions.
The ECB PressConference is scheduled for Thursday, December 14th, 2023, at 1:45 PMGMT.
