Week ahead: Inflation and Interest rates to shake the Markets this week

The week of December 9-13 promises to be packed with crucial events that could dictate the course of global markets. With a packed agenda of economic data and monetary policy decisions in various parts of the world, investors will be on the lookout to adjust their expectations amid volatility. On the radar, we have inflation figures from China, Germany and the US, interest rate decisions in Australia, Canada and Europe, as well as financial reports from giants such as Oracle, Adobe and Costco. This set of events will provide a comprehensive view of the state of the global economy and provide important clues for the beginning of 2025.

Here are the week’s key events:

Monday, December 9th: Inflation in China and Oracle's Earnings

This Monday, China’s inflation will be released, with expectations of 0.3%. This figure, still low, reflects a prolonged period of inflation close to zero, generating concerns about the health of the world's second-largest economy. Although the stimulus measures adopted by Beijing have been effective in certain sectors, the market is looking for signs of a more robust recovery in domestic consumption.

In the corporate sphere, the spotlight will be on Oracle, presenting its results. The technology giant has been accumulating successes in recent years, driven by the growing adoption of cloud solutions. Analysts are attentive to assess whether the numbers will continue to justify the high valuation of its shares. Will Oracle be able to sustain the upward trend, or will signs of a slowdown appear?

Tuesday, December 10th: Australia and Germany in Focus

Australia’s interest rates will be the highlight on Tuesday, with investors paying close attention to central bank decisions. With an economy that has shown resilience, markets are pricing in few changes, but any surprises could significantly impact the AUD. In Europe, German inflation will be closely monitored. After releasing several figures that point to a delicate moment in Germany’s economy, investors are hoping for a clearer indication of the economic trajectory of the eurozone’s largest economy. In the US, the stock market turns its attention to GameStop, which has faced ups and downs in recent years. Despite the volatility, the company is trying to prove that there is still room for growth in its diversification strategy. The report will show whether there is progress or if challenges persist.

Wednesday, December 11th: US Inflation and Adobe on the Radar

US inflation will be the main event on Wednesday, with direct implications for the Federal Reserve’s monetary policy. With readings falling since July 2022, inflation is starting to approach its target, which was determined by the FED at 2%, with the latest reading being 2.6%. This week’s data will provide a clearer picture of what the Fed will need to do next. In Canada, the interest rate decision will also be closely monitored, especially at a time when a major change in administration is taking place in the US, one of Canada’s main trading partners. Among companies, Adobe will release its results in the last few years, but the market will now be keen to see whether its numbers remain solid enough to maintain the upward trend of recent years.

Thursday, December 12th: Interest Rates and GDP in Europe

Thursday will be marked by a flurry of important events. In the UK, GDP will be the leading indicator, offering a view of the impact of recent economic conditions on growth. In addition, we will also have interest rate decisions for the Swiss Franc and the Euro. Decisions from the Swiss National Bank and the ECB could provide insight into how central banks are shaping monetary policy in Europe. Producer Price Index (PPI), which measures inflation data in the US, will also weigh on the dollar. In the corporate sector, Costco Earnings are on the radar. The retail giant has been beating expectations amid a resilient consumer outlook, and investors expect this to continue.

Friday, December 13th: Trade Balance and Inflation in Europe

The week ends with important economic data from Europe. Germany’s trade balance will be released, with potential implications for the euro, especially if it comes lower than expected. Inflation data will also be on the radar in Spain. With an economy that has handled inflationary pressures well compared to its peers, markets will be looking for signs of how the trajectory may develop in the coming months.

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