RBC Capital Markets

Week ahead: The post-Brexit EU-UK trade arrangement and the US fiscal stimulus bill could be decided this week. The EU has said that the European Council meeting on Thursday through Friday was the de facto deadline for the trade negotiations. The US FDA will on Thursday consider emergency deployment of the Pfizer-BioNTech vaccine. Key data releases and events include US CPI inflation (Thursday), which will be of interest given the recent jump in market inflation expectations, and the ECB policy meeting (see EUR).

EUR: The ECB is set to announce further easing measures on Thursday, and we expect an expansion of the PEPP program by €500bn along with a 6-month extension. We also expect a cut in the most preferential rate available through the TLTRO, and an extension of the application time to the end of 2021. The Germany ZEW survey will be out on Tuesday.

JPY: The data calendar for Japan includes October current account (Tuesday) and core machine orders (Wednesday).

GBP: We think that UK October GDP shrank by 0.7% m/m (Thursday), following the tightening of social restrictions ahead of the second lockdown in early November. Though retail sales surprised to the upside in October, most other indicators deteriorated between September, when GDP growth had slowed to 1.1% m/m, and October. Other data releases include industrial production and trade balance (both Thursday).

CNY: China monthly credit and financing data is scheduled to be released towards the end of the week, but before that we have China CPI inflation (Wednesday).

NOK/SEK: Norway October GDP (Wednesday), Norway CPI inflation (Thursday) and Sweden CPI inflation (Thursday) are on tap this week. CAD: Our economists expect no change in the BoC’s policy rate (0.25%), QE program (minimum C$4bn/week), or forward guidance at Wednesday’s non-MPR meeting. Covid-19 remains the dominant consideration, with the continued second wave leading to increased restrictions and even lockdowns in some areas. This contrasts with a better medium-term outlook from positive vaccine developments since the October MPR, with Governor Macklem acknowledging this briefly in a recent House of Commons committee appearance. The combination should leave the BoC comfortable with the current policy setting, following the QE calibration in October. Deputy Governor Beaudry will give the usual Economic Progress Report the day after the meeting.

Citi

Markets in Asia have traded in a lacklustre fashion after a strong showing for risk on Friday. Renewed headlines over the weekend that we are likely to see a USD 908bn Phase 4 fiscal package this week have mostly been ignored in Asia so far. Likewise, news around the US considering sanctions on various China officials over recent developments in Hong Kong has also been broadly overlooked outside Asian equity indices. Asia FX instead appears to be supported by strong November export growth and a record trade surplus in China.

Ahead today, all eyes will be on Brexit negotiations, where further discussions are set to take place prior to another call between UK PM Johnson and EC President von der Leyen in the evening (time unknown). Unsurprisingly, conflicting headlines over the weekend have seen GBP chop continue in Asia - more below. Otherwise on the data front, it is relatively quiet in G10, with SEK Riksbank minutes and industrial orders, as well as Germany IP the only prints of note. In EM, it is slightly busier, with TWD trade, BRL inflation, CZK retail sales, and a CLP rate decision (hold) alongside CPI.

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