Economic week ahead: Winding down
In the holiday shortened trading week ahead, the US will release personal incomes and spending data, Italy will report on consumer sentiment and Japan will conduct its monthly data dump. Closer to home, South Africa and Nigeria will release trade data and central banks in Angola and Zambia will announce rates decisions. Here is your guide to the week ahead.
The Banco Nacional de Angola (BNA) will announce its final policy decision of the year on Monday.
Officials cut the central bank's benchmark rate by 50-basis points to 9.25% at their November meeting – their third rate cut of the year following 25-basis point cuts in January and August – in a bid to boost growth. But with growth prospects improving, and inflationary pressures easing, policymakers are unlikely to take further action at this week's meeting.
Angola's 2014 budget, passed earlier this month, forecasts gross domestic product (GDP) growth in Africa's second largest oil producer of 8.8% next year, up significantly from 2013's estimated 5.1% economic expansion. November inflation figures from the Instituto Nacional de Estatistics (INE) – the country's statistics agency – showed that consumer price inflation decreased to 7.94%, year on year, in November from 8.38% in October.
Officials at the Bank of Zambia (BOZ) will follow their counterparts in Angola with a rates decision on Friday. The BOZ's monetary policy committee kept their benchmark rate at a record high of 9.75% for the fifth consecutive month in November and are likely to do the same this week.
In announcing their decision, officials noted that continued depreciation of the local currency and a rise in consumer demand were likely to put pressure on prices in December. Zambia's central statistics office reported that inflation rose to 7%, year on year, in November from 6.9% in October.
Beyond these two central bank meetings, economists and investors will be on the lookout for South Africa's detailed October trade statistics and Nigeria's third quarter trade balance this week, as well as third quarter GDP readings from Kenya and Ghana.
Following the Federal Reserve's decision to begin scaling back the level of its quantitative easing programme last week, and before corporates begin reporting fourth quarter earnings in January, markets are likely to focus on economic fundamentals as 2013 draws to a close. Several closely followed indicators are scheduled for release over the coming days.
Monday will bring last month's personal income and outlays (spending) report from the US commerce department, along with the latest sentiment readings from the Reuter's/University of Michigan consumer survey. Consensus is that personal income and spending each rose 5% in November, following a 0.1% monthly decline in income and 0.3% rise in spending in October. The Reuter's/University of Michigan consumer sentiment index is expected to rise to a headline reading of 83.5 this month from 82.5 in November, the index's best reading since July.
On Tuesday, attention will shift to the Census Bureau's durable goods and new home sales reports for November. New orders for durable goods – an indicator of how busy factories will be over the coming months – are expected to have risen 1.5% in November following a 2% decline in October. New home sales probably rose to a seasonally adjusted annualised rate of 450 000 units last month from 354 000 in October.
With no major releases scheduled for Friday, America's data week will close out on Thursday with the Employment and Training Administration's latest weekly jobless claims figures. Economists expect the report to show that 340 000 Americans filed for first-time unemployment benefits in the week ended December 21, down from 379 000 in the prior week.
An extremely light economic calendar, coupled with the mid-week Christmas holiday, is expected to keep European markets particularly quiet over the coming days. With the exception of Italy's latest consumer morale data on Monday and France's final third quarter growth figures on Tuesday, economists and investors will have little to distract from their focus on festivities.
Markets expect the Istituto di Studi e Analisi Economica (ISAE)'s December consumer confidence index to have risen to 98.9 from 98.3 in November. Households' improved view of their personal situations, in the wake of the government's decision to abolish an unpopular tax on primary residences, is the likely driver of the anticipated rise in overall sentiment.
France's final third quarter GDP figures will almost definitely confirm that Europe's number two economy contracted 0.1%, quarter on quarter, during the three months ended in September.
France's economic woes have served as a major drag on the eurozone's growth and the country's prospects remain dim. A survey of French manufacturers released last week showed that output contracted and that companies shed jobs in November in response to the sharpest slowdown in new orders observed since April. The country's services sector also declined, raising the chances that the country will slide back into recession.
Markets will be closed on Wednesday for Christmas and, with the exception of France's latest produce price index release on Thursday, no major economic releases are scheduled for the remainder of the week.
Thailand and Japan will dominate Asia's economic calendar this week. Officials in Thailand will release trade figures on Tuesday, followed by manufacturing output and current account figures on Friday. Japan – the world's third largest economy – will release consumer price inflation, household spending, industrial production and retail sales data, also on Friday.
Thailand's latest trade figures are likely to show that export volumes declined by 4.3% from a year earlier last month and that imports declined by 2.5% over the same period. The country's trade deficit, therefore, probably widened slightly to $1.800-billion in November from $1.771-billion in October.
Japan's latest consumer price index (CPI) readings are widely expected to show that officials are finally gaining ground in their long-running battle against inflation. Economists surveyed by Market New International expect that national core inflation rose 1.1% in November from a year earlier, up from a 0.9% rise in October and the largest rise since October 2008.
Household spending probably rose 2.0% in real terms from a year earlier in November, marking a third straight monthly rise. Industrial production likely rose 0.4% last month, down from 1.0% growth in October. Retail sales may have posted a 3.0% rise from a year earlier in November following a 2.4% increase in October.
Thailand's manufacturing output likely declined by 11.0% from a year earlier last month following a 4.0% contraction in production in October. The country's current account surplus is expected to have narrowed slightly to $300-million in November from $380-million in October.
Matt Quigley writes the Mail & Guardian's weekly economic preview. You can follow him on Twitter at @mattquigley.