It's going to be a super exciting week in the financial markets

It will be a real super week in the financial markets. Investors' emotions will be ensured by central banks and numerous important macroeconomic data published. At the same time, it will be the last week of active trading in the markets in 2022. Later on, the Christmas malaise will appear on the markets, and it will only get more interesting in the first days of January.

The week between December 12 and 18 started calmly in the markets. The UK industrial production data released this morning, which is the only major macroeconomic release on the calendar, did not cause much emotion. It is, however, the proverbial calm before the storm. There will be more than enough excitement in the days to come. They will be provided primarily by central banks. In the coming days, interest rate decisions will be made by, among others, American Fed, European Central Bank (ECB), Bank of England (BoE) i Swiss National Bank (SNB).

TUESDAY, DECEMBER 13, 2022

Investors will learn the latest data on consumer inflation (CPI) in the US. In November, it is forecast to fall to 7,3 percent. from 7,7 percent y/y in October, and core inflation is expected to fall to 6,1%. from 6,3 percent The data alone is unlikely to change expectations regarding the results of the December Fed meeting, but they may undoubtedly affect market expectations regarding the path of interest rates and their target level in 2023.

On Tuesday, in addition to the data from the US, there will be another release index of the ZEW institute for Germany (forecast: -26 points), as well as data from the British labor market, which may affect expectations regarding future decisions of the BoE.

WEDNESDAY, DECEMBER 14, 2022

On that day, the Fed will decide on interest rates in the US. It is expected to increase them by 50 basis points, raising the fluctuation range for the federal funds rate to 4,25-4,50 percent. Such a decision should already be in the prices. For the stock, debt and dollar markets, it will be crucial what interest rate forecasts will be included in the latest projection and what Fed chairman Jerome Powell will say at the press conference after the meeting.

On Wednesday, almost everything will be subordinated to waiting for the results of the Fed meeting. Therefore, other publications will recede into the background. The only exception will be the UK inflation data. These will be analyzed in terms of future BoE moves. UK CPI inflation is expected to fall to 10,9% in November. from 11,1 percent YoY a month earlier, with core CPI inflation at 6,5%.

THURSDAY, DECEMBER 15, 2022

On Thursday, interest rate decisions will be made by the European Central Bank (forecast: +50 bp), Bank of England (forecast: +50 bp) and the Swiss National Bank (forecast: +50 bp). The markets' attention will primarily focus on the former. And not only at the decision, which will be announced at 14:15, but also at the press conference scheduled for 14:45 for the head of the ECB, Christine Lagarde.

Before central banks absorb all investors' attention on Thursday, data from China on November's industrial production (forecast: 3,9% y/y) and retail sales (forecast: -3,0% y/y) will be released earlier. Paradoxically, the weaker the data, the better for the markets in the long term. Worse-than-expected readings increase the chances of Beijing leaving politics sooner zeroCOVID and more stimulus to the weakening economy. And that should make the markets happy.

On Thursday, reports from the US on industrial production, retail sales, unemployment benefits, as well as the Philadelphia Fed and NY Empire State indices will also be released. It's just that the day after the Fed meeting, it will be a bit of an "after-dinner mustard". Therefore, they will rather be ignored.

FRIDAY, DECEMBER 16, 2022

On Friday, preliminary readings of December PMI indices for Japan, the largest European economies and the US will be released. These will be the latest data describing the economic situation in the last month of the year. So they will certainly be watched by investors.

Also on Friday, December series of derivatives expire on stock exchanges, which may provoke additional volatility on them. And this regardless of other incoming impulses.