Covid-19 continues to weigh on the major economies, with the vaccine rollouts slowly gathering steam. The financial markets are monitoring the US stimulus plans as it winds its way through Congress.
This week’s highlights include Eurozone GDP and UK inflation reports.
Inflation was a bright spot in the eurozone, as German CPI rose from 0.3% to 0.8% in January. Germany’s Whole Price Index (WPI) jumped to 2.1%, up sharply from 0.6%.
British GDP reports were stronger than expected. The economy grew by 1.0% in Q4, better than the estimate of 0.5%. The monthly GDP rose 1.2%, beating the estimate of 1.0%. Still, the economy contracted by 9.9% in 2020, the sharpest annual contraction on record.
12/21/2020 4:58:36 AM GMT
There are key deadlines on both sides of the pond as the year 2020 quickly draws to a close. The Brexit talks continue as the EU and UK race to hammer out an agreement ahead of the December 31st deadline. In the US, lawmakers are trying to bridge the gaps and approve a massive stimulus bill that would also provide funding to stave off a government shutdown. On the fundamental front, it’s a quiet week, with the focus on GDP reports in the US, the UK and Canada.
German and eurozone Manufacturing PMIs improved in November and remain well into expansionary territory, with readings in the mid-50s range. The services sector remains in contraction, as the German and eurozone PMIs came in around the 47 line. Eurozone inflation remains at very low levels. Headline CPI fell by 0.3% in October, marking a fourth straight decline. Core CPI recorded a gain of 0.2%.
USD/CAD Forecast Dec. 21-25 – Will Canadian GDP shake up Canadian dollar?
USD/CAD posted strong gains on Friday but was almost unchanged over the week. The upcoming week has three events, including GDP. Canada’s inflation rate slowed to 0.1% in November, down from 0.4%. The core reading ticked lower to 1.7%, down from 1.8%. ADP Non-Farm Employment Change showed a small gain of 40.8 thousand in November, […]
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There are key deadlines on both sides of the pond as the year 2020 quickly draws to a close. The Brexit talks continue as the EU and UK race to hammer out an agreement ahead of the December 31st deadline. In the US, lawmakers are trying to bridge the gaps and approve a massive stimulus bill that would also provide funding to stave off a government shutdown. On the fundamental front, it’s a quiet week, with the focus on GDP reports in the US, the UK and Canada.
German and eurozone Manufacturing PMIs improved in November and remain well into expansionary territory, with readings in the mid-50s range. The services sector remains in contraction, as the German and eurozone PMIs came in around the 47 line. Eurozone inflation remains at very low levels. Headline CPI fell by 0.3% in October, marking a fourth straight decline. Core CPI recorded a gain of 0.2%.
USD/CAD posted strong gains on Friday but was almost unchanged over the week. The upcoming week has three events, including GDP.
Canada’s inflation rate slowed to 0.1% in November, down from 0.4%. The core reading ticked lower to 1.7%, down from 1.8%. ADP Non-Farm Employment Change showed a small gain of 40.8 thousand in November, marking the first gain since July. Retail sales slowed significantly in October. Headline retail sales fell from 1.1% to 0.4%, while the core reading fell from 1.0% to 0.0%.
In the US, headline and core inflation both rose slightly, from 0.0% to 0.2%. PPI was also weak, with the headlined and core releases coming in at a negligible 0.1%. Unemployment claims surged to 853 thousand last week, up from 712 thousand. This points to weakness in the labor market, as the economy continues to struggle. The week wrapped up on a positive note, as UoM Consumer Sentiment improved to 81.4 in December, up from 77.0 beforehand.