This week’s most important economic events will come from the US in the shape of the FOMC Interest Rate Statement, Existing Home Sales, New Home Sales and Gross Domestic Product.

With the Federal Open Market Committee already committed to a Federal Funds Rate of 0.00-0.25% there is basically no room for manoeuvre on the downside. However, the Fed could surprise the market and reduce the range closer to the BOJs 0.10 percent Overnight Call Rate.

With the Fed having used almost all of its ‘interest rate cut toolkit’ to stimulate the US economy there may be a change of focus to the outright purchase of long-term Treasury securities. This would attempt to bring interest rates lower across the yield curve, reducing the cost of a mortgage, in an effort to stimulate the housing market. However, with uncertainty in the jobs market and weak consumer confidence there may be continued weakness in housing for some time to come.

This Week
The first high volatility event of the week will be US Existing Home Sales, due for release at 15:00 on Monday. Data for December 09 is likely to show that the annualized sales pace of Existing Homes fell to 4.40M from 4.49M in November.

Tuesday will begin with Australian PPI at 00:30. Wholesale inflation for the fourth quarter of 2009 is expected to slow to 0.4% from 2.0% in Q3.

German Ifo Business Climate is scheduled for release at 09:00. The German economy is seen as a leading indicator for  Eurozone economic health  as a whole so the index will be closely watched. The index is expected to decline slightly from 82.6 to 81.0 for the month of January.

High volatility is also due from the UK at 11:00 on Monday. The Confederation of British Industry (CBI) Realised Sales indicator is expected to improve slightly to -53 from the previous -55.

At 15:00 the Conference Board’s US Consumer Confidence reading is due. As a precursor for consumer spending and overall economic health, this consumer confidence reading will be closely watched. The index is expected to improve slightly to 38.0 from the 38.7 seen for the month of December.

On Wednesday anticipation will be building for the FOMC Interest Rate Statement however, prior to this event Australian CPI will be released at 00:30 in the overnight session. Expectations are for a first quarterly fall in CPI to -0.4% after the 1.2% seen in Q3 of 2009.

At 19:15 we will see the highly anticipated Federal Funds Rate announcement with no change expected. The accompanying FOMC Interest Rate Statement is expected to create high volatility with comments on further “support for the functioning of financial markets” to be closely scrutinized.

The Fed isn’t the only central bank due to release monetary policy decisions on Wednesday with the RBNZ Interest Rate Statement also due. The Official Cash rate is likely to be cut to 4.00% from the 5.00% seen previously with economic growth in New Zealand under threat.

New Zealand will also announce Trade Balance data for December with the deficit expected to fall to NZD 100M from the 520M seen in November.

Thursday is set to be typically busy with the Nationwide House Price Index (HPI) due at 07:00. Expectations are for a 1.8% fall in house prices for January, following on from December’s 2.5 percent decrease.

There are several high volatility events due in the US session with Core Durable Goods Orders and Initial Jobless Claims both expected at 13:30. Core Durable Goods Orders probably fell by 2.6% in December following on from a revised 0.6% increase in November. Initial Jobless Claims came extremely close to the 600K mark last week (589K) with that number expected to fall slightly to 580K this week.

In the evening session New Zealand Building Consents will be released at 21:45 GMT. Consents increased by 4.3% in November of 08 after a fall of 19.7% the month previous.

The very last piece of key economic data from the US will be released at 13:30 on Friday. Gross Domestic Product (GDP) is expected to show a 5.4% decline in economic growth for Q4 2008. This is after a 0.5% decline in the third quarter.

Canadian monthly GDP will be released at the same time with a fall of 0.5% expected for November 08 after the -0.1 percent seen in October.

Please check our Economic Calendar for updates and actual releases as the week progresses.

US PPI fell by 1.9% in December the Bureau of Labor Statistics confirmed today. Economists had been expecting a 2.0% drop following November’s 2.2% decline.

Although today’s US PPI number was mildly better than expected it still represents the fifth straight month of declines in wholesale inflation. Furthermore, the YoY index now shows a decline of 0.9%, the lowest reading since October 2006. The yearly Producer Price Index has deteriorated from a high of 9.9% in a few short months since July 08.

The decline seen in December can mostly be attributed to a 9.3% drop in Energy prices and a 1.5% fall in Foods. Energy prices have fallen at the wholesale level for 5 months in a row, posting an 11.2% drop in November.

On closer inspection, the decline in Energy is due to a 25.7% fall in gas prices (tying the record set in November of this year), a 24.1% fall in home heating oil (largest drop since April 2003), and declines of 21.8 and 17.5 percent in liquefied petroleum gas and diesel fuel respectively.

Inflation in foods has been mixed of late, with only 2 of the last 5 months in negative territory. However, the 1.5 percent fall seen today would suggest acceleration towards the negative after a flat November and a slight 0.2% decline in October.

US Core PPI (excluding food and energy) increased by 0.2% in the month of December. This is slightly higher than the 0.1% that had been expected by economists and higher than the 0.1% seen in November.

Core Producer Prices now stand at 4.3% on a yearly basis, the highest seen since October’s 4.4%.

US PPI Visual Analysis and Historical Data

With a plethora of high impact data due this week there should be no shortage of market volatility. However, the ECB’s  Minimum Bid Rate Announcement, US Retail Sales, CPI and UoM Consumer Sentiment look certain to dominate events.

This week
This week, high volatility events begin on Monday at 15:30 with the Bank of Canada Business Outlook Survey. The quarterly survey will be watched very closely due to the significance of the firms that are surveyed. A change in sentiment within these firms can be a precursor to future economic activity and economists will be looking for signs of job losses or a reduction in investment.

Also on Monday the NZIER Business Opinions Survey is due to be released. This is New Zealand’s equivalent to the BOC Outlook Survey so traders will be keen to see how businesses are likely to react to current economic conditions. This indicator came in at -19 in the third quarter of 2008.

On Tuesday our first major event will be Ben Bernanke’s participation in the Stamp Memorial Lecture Series organised by the London School Of Economics (LSE). He is due to speak about “Policy Responses to the Financial Crisis” at 13:00 in London.

At 13:30 US and Canadian Trade Balance data will be released. The US is currently running a trade deficit of $57.2B but this is expected to have improved slightly to $53.5B in November.

Canadian trade surplus for the month of November is expected to come in at CAD 3.3B after October’s 3.8B. Canadian trade surplus has been slowly eroded over recent months, falling from a revised $5.6B in September.

Building Consents from New Zealand will complete Tuesday’s events. The monthly reading for December will be closely watched following November’s 21.9% fall in approvals issued.

Australian Home Loans are due to be released at 00:30 on Wednesday morning. Data for November is expected to show a 1.0% increase in the number of new loans granted following on from a 1.3% increase in October.

Later in the day focus will shift to the US with Retail Sales and Core Retail Sales for the month of December due at 13:30. This data will be closely watched because it is an indication of consumer spending during the holiday season; largely regarded as the busiest in the retail sector’s calendar. A decline of 1.3% is expected in the Core number, following on from a 1.6% fall in November. The headline figure is expected to show a drop of 1.2% MoM after the 1.8% decline seen one month previous.

Thursday promises to be a very busy day, beginning at 00:30 with Australian employment data. Employment Change for December is expected to show that the Australian economy shed 20K jobs, following on from a reduction of 15.6K in November. The Unemployment Rate over the same time period is expected to have increased from 4.4% to 4.5%.

The most important piece of news of the day from Europe will be the combination of the ECB Interest Rate Announcement and the ECB Press Conference. Although the Minimum Bid Rate announcement itself is only regarded as a medium volatility event it cannot be denied that traders and economists will be watching it very closely. The ECB is expected to cut rates from 2.50% to 2.00%. Once this has been confirmed, attention will switch to the press conference for an insight into the decision. Traders will also be looking for clues to future interest rate moves. The ECB press conference is due at 13:30 GMT.

Also due at 13:30 is US PPI and Initial Jobless Claims. Wholesale inflation is expected to have declined by 2.0% in December, following on from a 2.2% decline in November. US Initial Jobless Claims came in slightly better than expected last week at 476K. However, this is still an indication that the US economy is in recession and a figure of 520K is expected this week.

Friday will be dominated by high ranking US data. We begin at 13:30 with the Core CPI. Economists are expecting an increase of 0.1% in consumer inflation for the month of December after a flat November.

The next piece of news to cross the wire will be TIC Net Long-Term Transactions. After a huge fall to $1.5B in October vs the $66.2B seen in September, net investments in US securities is only expected to recover to $2.0B for November.

To close the week we will see the University of Michigan Consumer Sentiment (preliminary reading). Economists are expecting the index to drop slightly to 59.5 from the revised 60.1 seen one month ago.

Financial markets around the world go full steam ahead this week after two-weeks of holiday disruption. Traders will be returning to their desks in time for major economic data releases from the US, UK, Canada, Australia and New Zealand so it promises to be a busy week.

This Week
The high volatility doesn’t get started until Tuesday with the Nationwide House Price Index at 07:00. The index is expected to show that house prices contracted by 1.5% in December compared to the -0.4% seen in November.

At 09:30 we will see the Services PMI for the month of December from the UK. The index currently stands below the expansion/ contraction zone registering a 40.1 in November. Economists are expecting further deterioration to 39.0 in December.

US high volatility is due at 15:00 with two releases expected. The ISM Non-Manufacturing PMI probably contracted further in December to 36.8 from 37.3 one month previous. Pending Home Sales, also due at 15:00, are likely to show a 0.8% contraction for the reporting period of November. This follows on from October’s -0.7 percent.

One of the most highly anticipated events of the week is due at 19:00 with the release of the FOMC Meeting Minutes. The minutes are from the Fed’s December 16th 2008 meeting where the decision was taken to cut the Federal Funds Rate from 1.00% to 0.25%. Traders will be looking for an insight into the decision and any indication that rates may be cut further to 0.00%.

At 21:45 the New Zealand Trade Balance will be announced. The data is for the month of November and is expected to show a contraction in the trade deficit from 942M to 838M NZD.

Wednesday will be slightly quieter with two high influence economic announcements due. At 00:30 the Australian Retail Sales Trend number for November will be released. A consensus estimate is yet to be released, however we are following on from a 0.2% MoM increase in October.

At 13:15 GMT we have the first of the week’s significant employment data. ADP Non-Farm Employment Change is expected to show 450K jobs were lost in December, following on from a revised number of -472K in November.

Thursday begins with high volatility from Australia. Building Approvals and Trade Balance data are both due at 00:30. Building Approvals for November are expected to show a 1.3% decline after a fall of 5.4% in October. Australia’s trade surplus is expected to have decreased slightly in November to AUD 2.15B, down from 2.95B the month before.

Later in the day we will see the BOE Interest Rate Statement. Expectations are that the Bank will reduce the Official Bank Rate to 1.50% from 2.00%.

At 13:30 US Initial Jobless Claims will be reported. Claims are expected to rise above the 500K mark once again to 540K from the 492K seen last week.

Canada’s Ivey PMI is set to be released at 15:00. The indicator is designed to give a snapshot of the economy as a whole and it is expected to continue its deterioration to 38.0 from the 40.2 seen in November.

High volatility will hit the market in three pockets on Friday, with the first coming from the UK. Manufacturing Production and PPI Input will be released at 09:30. Manufacturing Production will be reporting for the month of November where output likely fell by 0.5% on the month after a 1.4% decline in October. PPI Input for December will probably show that wholesale inflation fell by 2.0% in December after a 3.3% drop in November.

At 12:00 Canada will release employment data for the month of December. Employment Change is expected to show that the Canadian economy shed 21.0K jobs following a loss of 70.6K in November. The Unemployment Rate is expected to climb from 6.3 to 6.5 percent.

At 13:15 Canada will release its Housing Starts numbers for December. The annualized rate of new residential constructions is expected to have increased from 172K to 175K.

At 13:30 the highly anticipated Non-Farm Employment Change and Unemployment Rate numbers are due from the US. Non-Farm Employment Change is expected to show that the US lost 475K jobs in December after it shed 533K in November. The US Unemployment Rate likely grew to 7.0% from 6.7% one month previous.

At the same time Canada will release its monthly Building Permits data for November. There was a huge contraction of 15.7% in October with a further 3.7% fall expected in November.

There was resoundingly negative news from the US Housing Market today as New Home Sales and Existing Home Sales both fell to multi-year lows.

Data from the National Association of Realtors showed that sales of Existing Homes dropped to 4.49 million units, an 11-year low. This fall represented a record 8.6% monthly decline from October’s revised 4.91M. Economists had been expecting a modest moderation to 4.90 million units.

This is the first time that the annualized rate has deviated significantly from the 5 million mark in more than a year. Sales have remained relatively consistent since the drop from 5.50M to 5.11M in August/ September 2007. This is despite the fact that the median sale price of Existing Homes has dropped by 13.2% over the past year. This is the largest year-over-year decline since records began in 1968 and “probably the largest price decline since the Great Depression.”

On a regional basis the Northeast led the decline in sales, down 12.0% on the month and 18.0% in the last year. The Northeast has now marginally overtaken the West as the worst performing region over the past 12 months. The South was down by 10.9% (-17.6% YoY), followed by the Midwest and West down 7.4% and 4.3% in November, 16.0% and 17.9% respectively on the year.

The median sales price of Existing Homes has fallen across all four regions in the last year. The West has been hardest hit, down a staggering 25.5%, while the Northeast is only down 0.1% at $257 700. The Midwest and South currently stand at -11.2 and -10.6 percent on the year.

Inventories were up a touch to 4 203 000 from the 4 198 000 seen in October. However, at the current sales pace this sees the monthly supply move up to 11.2 months, the highest since April of this year.

New Homes Sales were equally as disappointing in November. According to the Census Bureau the seasonally adjusted, annualized sales rate currently stands at 407K, the lowest rate since January 1991. This represents a 2.9% MoM fall from October’s revised estimate of 419K. Furthermore, sales of single-family new homes are now 35.3 percent lower than they were at the same time last year.

On a yearly basis, all four regions are in negative territory in terms of units sold. The largest decrease has been seen in the South with sales 38.1% lower over the past 12 months. The Mid-West (down 34.9%), West (-32.2%) and the Northeast (-27.3%) aren’t too far behind.

Between October and November sales in the Northeast and West actually increased by 14.3 and 11.0 percent respectively. However, In the Midwest and South declines of 16.4 and 7.1 percent were reported.

The median sale price of a single family new home increased to $220 400 in November from October’s 214 600. However, this is 11.1% lower than the 2007 year ending price.

The US CPI fell by 1.7% in November while Core CPI came in flat, the Bureau of Labor Statistics reported today. Expectations had been for a 1.2% drop in headline CPI and a 0.1% increase in the Core number.

The decline in headline CPI is the largest MoM decline since records began in 1947 and it drags the YoY figure to just 1.1%, the smallest rate of consumer inflation since June 2002. The biggest monthly price reductions were seen in transportation and energy, down 9.8 and 17.0 percent respectively. Incidentally, both of these sectors sit firmly in negative territory for the last year. Energy is down by 13.3% and transportation by 8.9% in the 12 months ending November.

Core CPI now stands at 2.0% YoY, lower than the 2.1% that had been expected and below October’s 2.2% reading. It remains to be seen whether the Fed has already priced this reduction in consumer prices into its upcoming Federal Funds Rate announcement. At present time the consensus estimate is for a 0.50 percent cut by the Fed which will take the Federal Funds Rate down to just half of one percent.

**In the last few minutes it has been announced that The Fed has cut the Federal Funds Rate by more than expected to 0.25%, a 0.75% cut.**

Next week will be the last of the calendar year without any holiday interruptions. We have a moderately busy economic calendar set out for us and it would not be unusual to see trading volume diminish significantly as the week wears on.

In particular traders will be watching CPI releases from major economies, Retail Sales and Interest Rate announcements from The Fed and BOJ.

Next Week
The first high volatility event is scheduled in the overnight session at 23:50 on Sunday. The Japanese Tankan Manufacturing Index is expected to deteriorate for the fourth quarter to -23. Third quarter data had seen the index slip into negative territory at -3.

Monday will be a fairly quiet day with just the one significant event scheduled. The US Treasury will release treasury International Capital, or TIC Long-Term Transactions for October. Expectations are for a fall in the net value of foreign investment in US securities to $40.0B from the $66.2B seen September.

In the early hours of Tuesday morning, at 00:30, the RBA will release its Monetary Policy Meeting Minutes from the December 2nd meeting. High volatility is expected as traders look for an insight into the 1.00 percent cut in the Cash Rate.

At 09:30 we have the first of the week’s Consumer Price Index releases. Yearly CPI from the UK is expected to continue its moderation, likely down to 3.9% in November from 4.5% in October.

The US will also be releasing CPI data for November. The Fed prefers the Core CPI rate and this number is expected to show a 0.1% rise following the surprise -0.1% in October.

At the same time (13:30) Building Permits will also be released. Expectations are for a fall in the annualized number of new residential permits issued during November to 700K. The number for October came in at 708K, a MoM drop of 12 percent.

Possibly the most highly anticipated event of the week will take place at roughly 19:15 on Tuesday. The FOMC Interest Rate Statement is expected to reveal a 0.50 percent cut in the Federal Funds Rate to 0.50%. Interest rate futures are currently pricing this move in at 100% with a 75% chance of a deeper 0.75% cut.

Wednesday will be dominated by news from the UK. At 09:30 we are due to see Claimant Count Change and the December 4th BOE MPC Meeting Minutes. The monthly change in people claiming unemployment benefit for November probably increased to 45K from 36.5K a month earlier.

The MPC Meeting Minutes are expected to reveal a unanimous decision to cut rates by 1.00% on December 4th. However, traders will be very keen to see whether a larger cut was considered.

Moving forward to 11:00 we will see the CBI Distributive Trades Survey, or Realised Sales. The Index is expected to have improved slightly, up to -41 from -46 over the since the last release on November 28th.

In typical fashion, Thursday will be a busy day. We begin at 02:00 with the NBNZ Business Outlook Survey. The Index came in at -43 for the month of November.

High volatility is expected from the Eurozone with the German Ifo Business Climate Survey at 09:00. Consensus estimates are for a number of 84.0 after the 85.8 seen in November.

UK Retail Sales for November will be released at 09:30. Coming into the busy festive period MoM sales are expected to have fallen by 0.6% after a 0.1% decline in October.

Canadian Core Retail Sales should produce high volatility at 13:30. After an increase by 0.8% in September, sales are expected to have fallen by 1.0% in October.

At the same time US Initial Jobless Claims will also be released. Last weeks number of 573K was a 26-year high but claims are expected to moderate this time around, down to 558K.

On Friday morning we will see the second central bank monetary policy announcement of the week. The BOJ will release its Overnight Call Rate and is expected to remain on hold at 0.30%. High volatility will likely be reserved for the BOJ Press Conference later in the day as traders look for an insight into the decision.

Rounding off the week we have the Canadian Core CPI. Core CPI in November is expected to show a monthly decline of 0.2%, equalling the 0.2% drop seen in October.

Wholesale inflation fell by 2.2% in November, the US Bureau of Labor Statistics reported today, completing a fourth straight monthly decline. The consensus estimate had been for a 2.0 percent drop following on from October’s record drop of 2.8%.

PPI MoM for the last 12 reporting periods

Leading the declines in November were energy prices. After a 12.8% drop in October, energy was down 11.2% for the month of November. Liquefied petroleum gas and home heating oil accelerated declines in November, down 25.7 and 23.3 percent respectively after 24.9 and 9.6% declines one month earlier. Declines slowed in residential natural gas and unleaded premium and mid-premium gasoline.

Prices for consumer foods came in unchanged after a fall of 0.2% in October. Within the index, eggs posted the sharpest monthly fall, down 18.2% with milled rice and pork both down 5.3%. Fresh fruit and vegetables were up by 2.1 and 3.8 percent respectively.

The Producer Price Index shows that wholesale prices are 0.4% higher than they were at the same time last year. However, this has fallen sharply from the peak of 9.9% in July and 5.2% just one month ago. Indeed, the current yearly figure is the lowest seen since January of 2007 and is further evidence that price pressures are falling away sharply in the US.

Elsewhere the Core PPI was up 0.1% MoM and inline with economists’ expectations. Traders had been expecting a moderation following the 0.4% seen in October. On a yearly basis the core number, which strips out the volatile food and energy components, is up by 4.2%.

Aside from the headline number for finished goods the index for intermediate goods fell by a record 4.3% while crude goods were down by 12.5%. Last month Intermediate goods dropped by 3.9% while crude goods fell by 18.6%.

The question on traders’ minds is whether the financial markets will continue to ignore poor economic data. Following the lack of decisive action on the back of Friday’s shockingly poor Non-Farm Employment report, it remains to be seen whether this week’s economic announcements will provide anything more than a knee-jerk price reaction seen at the time of release.

This Week
The first high volatility event of the week will be the UK’s PPI Input at 09:30 on Monday. Expectations are for a MoM decline in wholesale inflation by 2.9% in November after the -5.6% seen in October.

At 13:15 we are due to see Canadian Housing Starts for the month of November. Expectations are for an annualized number of 194K, down from the 212K reported for October.

At 14:00 (15:00 CET) ECB President Trichet is due to testify before the Committee on Economic and Monetary Affairs of the European Parliament. The Quarterly Hearing usually takes the form of an introductory statement followed by a Q&A session.

On Tuesday morning we will see further high volatility from RBA Governor Glenn Stevens' speech at the Australian Business Economists Annual Dinner in Sydney. The event is scheduled to begin at 09:00 UK time.

This will be closely followed by the UK’s Manufacturing Production at 09:30. Expectations are for a 0.6% contraction in output in October after a 0.8% contraction in September.

At 10:00 the German ZEW Economic Sentiment number will be released. The index improved slightly last month to -53.5. However, economists are expecting a reading of -56.5 this time around.

Tuesday will also host the first of this week’s central bank interest rate announcements. The BOC Interest Rate Statement is likely to see the Overnight Rate slashed by 0.50 percent to 1.75%.

At 15:00 the first high volatility event of the week from the US is due. Pending Home Sales for October likely fell by 3.2% after Septembers 4.6% drop.

There is only one high volatility event scheduled for Wednesday and it comes during the overnight session. Australian Home Loans data for October likely saw an increase of 1.0 percent in the number of loans granted after the 2.7% fall in September.

Thursday will be a very busy day with the high volatility beginning in the overnight session. Australian Employment Change and Unemployment Rate are due for release at 00:30. Employment Change for November likely saw a fall of 15K jobs after the Australian economy added 34.3K in October. The Unemployment Rate, as of November, is likely to have increased to 4.4% from 4.3% in the previous month.

At 08:30 the SNB will be in focus as it announces the Libor Rate, releases its quarterly Monetary Policy Assessment and the Governing Board Members hold a press conference. High volatility can be expected for each one of these events with Libor midpoint likely to be shifted to 0.50% from 1.00%.

Focus will shift to North America at 13:30 with three high volatility events scheduled. The US Trade Balance will be released with a slight moderation to $53.5B in the trade deficit expected. At the same time Initial Jobless Claims will also be released. Economists expect 530K individuals to have filed for unemployment insurance for the first time during the past week.

At the same time, slightly overshadowed by the release from the US, the Canadian Trade Balance will also be released. The Canadian trade surplus is expected to have narrowed to CAD 3.2B from 4.5B in September.

Thursday will be rounded off by Core Retail Sales and Retail Sales from New Zealand. Core Retail Sales for October are expected to have increased by 0.8% MoM after a 0.5% decrease in September. For the same period Retail Sales were likely flat at 0.0% following on from a slight 0.1% increase a month earlier.

Friday will play host to a busy US session with some key data releases. At 13:30 Core Retail Sales, Retail Sales and the Producer Price Index will be hitting news wires. Core Retail Sales are expected to have fallen by 1.7% in November, with the headline Retail Sales number thought to have dropped by 1.9% in the same period. US PPI is also expected to fallen in November. Expectations are for a 2.0% fall in prices at the wholesale level after a similar 2.8% drop in October.

To round off the week we will see important consumer confidence data in the shape of the University of Michigan Consumer Sentiment number. Traders are expecting a reading of 55, relatively unchanged from last month’s final reading of 55.3.

Financial markets are preparing themselves for a wealth of economic data this week with central bank interest rate cuts and employment data in focus.

This Week
With high volatility events expected everyday this week there will be no shortage of market action. We start on Monday with the UK’s Manufacturing PMI. The index is firmly set in a state of contraction with a reading of 41.5 for October likely to worsen to 39.8 in November.

At 13:30 Canadian monthly GDP will be released. This release will reference the month of September with 0.2% monthly growth expected after a 0.3% contraction in August.

Manufacturing data is also due from the US on Monday with the release of the ISM Manufacturing PMI. Similarly to the UK, US manufacturing is in a period of contraction. The reading for November is expected to come in at 37.2, worse than the 38.9 seen in October.

Ben Bernanke will speak at the Greater Austin Chamber of Commerce on Monday with his speech expected to draw heavy interest and subsequent volatility. He will be the keynote speaker at the Annual Economic Forecast event organised by the Austin Chamber.

On Tuesday we will see high volatility concentrated in the overnight session with key data due from Australia. At 00:30 UK time the Retail Sales Trend figure for October is to be released. Economists are expecting 0.1% MoM growth after Septembers 0.2% increase.

We will be staying in Australia for the week’s first central bank interest rate announcement. The RBA Interest Rate Statement is expected to confirm expectations of a 0.75% cut in the Cash Rate from 5.25% to 4.50%.

On Wednesday we will see more high volatility from Australia with the quarterly GDP release. Data for the third quarter is expected to show a 0.2% growth in GDP after the 0.3% reported in Q2.

At 09:30 we will see information from another of the UK’s key industry sectors. The Services PMI for November is likely to have deteriorated to 41.2 from 42.4 in October.

This week’s key North American events are undoubtedly the employment data releases. The first of which comes from the US on Wednesday in the shape of ADP Non-Farm Employment Change. Traders are using this number as a guide to official Non-Farm Payrolls due later in the week so high volatility can be anticipated. It is expected that the US economy lost 200K jobs in November after losing 157K in October, according to ADP.

Next up for the US will be the ISM Non-Manufacturing PMI at 15:00. Like its manufacturing counterpart the index is inside the contraction zone with a reading of 42.5 expected after October’s 44.4.

Wednesday will play host to more monetary policy relaxation, this time from the RBNZ. The RBNZ Interest Rate Statement and the accompanying press conference are both regarded as high volatility events. The RBNZ is expected to reduce the Official Cash Rate from 6.50 to 5.00 percent, a full one and a half point cut.

Thursday will see economic data coming thick and fast beginning in Australia. At 00:30 Building Approvals and Trade Balance are due. Building Approvals likely recovered 0.2% in October after a 7.2% slump in September. Trade Surplus is likely to remain relatively unchanged at 1.45 AUD after 1.46 AUD in September.

The Halifax House Price Index is due at 08:00 on Thursday. This index is the first to be released from the UK on the latest month’s housing market with a reading of -1.0% expected for November. In October house prices fell by 2.2% according to the Halifax Bank of Scotland.

At 12:00 we will see the BOE Interest Rate Statement. The MPC is expected to vote for a 1.00% Official Bank Rate cut to 2.00% as they look to manage the UK’s economic downturn.

Speculation is rife that the ECB will cut rates heavily on Thursday after the Flash CPI Report showed that consumer inflation had fallen to just above the ECB’s 2.0% target. Expectations are for a 0.75% cut in the Minimum Bid Rate to 2.75% when the ECB Interest Rate Announcement hits news wires at 12:45.

At 13:30 we will see high volatility announcements from three different economies. The ECB Press Conference will be closely watched as traders look for clues to future monetary policy shifts from the ECB. At the same time traders will be watching Initial Jobless Claims as a figure above 500K is expected once again. Canadian Building Permits are also due with a 6 percent decline anticipated for October.

The Canadian Ivey PMI is due at 15:00 on Thursday. The Index has managed to hold its head above the expansion/ contraction line at 50.0 until this point with economists expecting a reading of 50 dead this time around.

Further high volatility is expected with Fed Chairman Bernanke’s involvement with the President’s Conference on Homeownership and Mortgage Initiative in Washington DC at 16:15.

Friday will be dominated by employment data from North America. At 12:00 Canada will release its Employment Change and Unemployment Rate numbers for November. Employment Change is expected to show -21.0K compared to 9.5K jobs added in October. The Unemployment Rate in Canada is likely to increase to 6.4% from 6.2% previous.

The US economy has been shedding jobs at a rapid rate recently and economists are expecting another bout of negative data for the month of November. Non-Farm Employment Change from the Bureau of Labor Statistics is likely to show that 320K jobs were lost in November to add to the 240K cut in October. The US Unemployment Rate, also due at 13:30, should increase to 6.8% from 6.5% seen one month previous.