We bring you a regular overview of the most important economic events that influenced our trading in the second trading week of this month.
The first half of the week already offered us a number of interesting data on interest rates coming from Australia and Canada.
On Tuesday (7.12.2021) the RBA (Reserve Bank of Australia) left interest rates unchanged at 0.10 %. The Board decided at the meeting to hold the cash rate at 10 basis points and continue to purchase government securities at a rate of 4 billion per week until mid-February 2022. Household consumption is recovering strongly and the economy is expected to return to pre-Delta levels in the first half of 2022. However, there is a valid concern about the uncertainty surrounding the new version of the Omicron.
A day later, new data came in regarding interest rate changes from Canada, which also left them unchanged at 0.25 %, as expected. The BOC (Bank of Canada) continues to reinvest and maintain its holdings of government bonds. The economy continues to recover from the pandemic and grew by 5.5 % in the third quarter as expected. This suggests that the economy has gained considerable momentum. However, the Governing Council believes that the economy needs to continue to be supported significantly. As elsewhere, the Omicron has introduced new uncertainty.
At the end of the week, we were waiting for the incoming UK GDP data, which came in slightly worse than in November (0.1 % actual, vs. 0.6 % previous).
What's in store for the current trading week?
This week we expect increased volatility on currency pairs containing USD, GBP, EUR and JPY. The first half of the week will see data from the UK regarding the change in unemployment. Other important data awaits us in the second half of the week where we can expect the Fed's interest rate decision and GDP to come out of New Zealand. On Thursday, we will turn our attention to the EU interest rate decision. The end of the week is also likely to be more volatile as Japan will also offer us its interest rate decision.
In the photo: RBA Governor Philip Lowe