Merry Christmas! Christmas already starts on Tuesday, so we wish you, dear investors, all the best! Due to Christmas, most markets will be closed on Tuesday, Wednesday and Thursday. Even before Christmas, the Fed cut interest rates by 25 bps, which boosted the dollar. USD/PLN rose to 4.12 and EUR/USD fell below 1.04. The meeting had a distinctly hawkish tone, with inflation and GDP growth forecasts for 2025 raised and fears of recession giving way to optimistic scenarios. In the short term, the dollar remains strong, although further appreciation may be limited if the US economy weakens in 2025. The festive period also affects the timing of macroeconomic data releases. Key readings this week include final UK GDP data on Monday and Friday's inflation reading in Japan.
Table of contents:
- UK gross domestic product (GDP) quarterly (Q3).
- Japan's core consumer price index (CPI) annualised (December)
Monday 23.12, 8:00 CET, UK gross domestic product (GDP) quarterly (Q3).
UK GDP grew by 0.1 per cent quarter-on-quarter in Q3 2024, the slowest in three quarters. The services sector grew by 0.1 per cent. Construction grew by 0.8 per cent and the manufacturing sector fell by 0.2 per cent. Net trade improved performance as imports fell faster than exports. Household spending increased by 0.5 per cent, business investment by 1.2 per cent and government consumption by 0.6 per cent. The economy accelerated at an annualised rate of 1 per cent (0.7 per cent in Q2).
Analysts forecast confirmation of quarterly UK GDP growth of 0.1 per cent q/q.
Source: Tradingeconomics.com
A higher-than-expected reading could have a bullish impact on the GBP, while a lower-than-expected reading could be bearish for the GBP.
Impact: GBP/USD, EUR/GBP, GBP/PLN
Friday, 27.12, 00:30 CET, Japan's core consumer price index (CPI) annualised (December)
Inflation in Japan is still around the Bank of Japan's (BoJ) target. Tokyo's core consumer price index rose by 2.2 per cent year-on-year in November 2024, reaching its highest level in three months. At the last meeting, BoJ Governor Kazuo Ueda suggested a possible interest rate hike in the face of a weak yen.
Analysts forecast an increase in Japan's core CPI inflation to 2.3 per cent.
Source: Tradingeconomics.com
A higher-than-expected reading could have a bullish impact on the JPY, while a lower-than-expected reading could be bearish for the JPY.
Impact: EUR/JPY, USD/JPY
Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)
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