The Week Ahead

During the week ahead the market is likely to look towards a number of key market themes and events which have the potential to indicate financial market moves.

The rate decision from the Bank of Japan is the main event of the week this week. A large data dump from the US economy is also on cards alongside a key rate decision from the PBOC.

BoJ Policy Meeting

The normally dovish Bank of Japan is widely tipped to stick with the negative interest rates that have set it apart from its global peers at its final meet of the year on this week, despite rising inflation.

The annual rate of inflation hit 3.6% in October, which was the biggest increase in over 40 years, driven higher by rising energy and food prices. Stabilization of the yen currency may also be mentioned this week.

BOJ Governor Haruhiko Kuroda is due to step down in April after a decade at the helm and a major policy shift is seen as unlikely before then.

Meanwhile inflation data for November is due out on Thursday and is expected to show another uptick.

US Data

Following last weeks Fed policy, investors get an update on the health of the US housing market this week, starting with November figures on market, which has recently shown sign of turning lower.

Rising mortgage rates prompted US Existing home sales fall for a record ninth straight month, while home-building fell sharply with single-family projects hitting the lowest levels in almost two-and-a-half years.

A falling US housing economy is bound to hit the US consumed hard. Hence why this week’s housing and combination of consumer confidence data will be ultra-important.

The Conference Board is to release its Consumer Confidence Index on Wednesday, which is expected to tick higher after plumbing a four-month low in November.

Data on on personal spending is due for release on the last trading day of the week and will be closely watched after the last two consumer price index reports indicated that price pressures appear to be cooling.