Summary:

• Final CPIs from Eurozone on the agenda today
• The US Congress is to pass the final version of tax-cut bill this week
• Riksbank may decide to change its monetary policy

After an avalanche of central bank decisions last week some might be already eyeing Christmas. However, it is quite likely that this week will be very interesting as the Tax Plan in the US is on the final straight. On top of that Wednesday through Friday is quite busy in terms of macroeconomic releases and Swedish Riksbank will take its decision on rates. The final CPIs from Eurozone are the sole important market event in today’s calendar.

10:00 am BST – Eurozone, the final CPIs for November. Inflation is the key issue for ECB, hence this data is usually important. However, we get the final readings today and they are rather unlikely to surprise the market. The headline figure is expected come in at 1.5% y/y, whilst the core measure should increase by 0.9% y/y.

US Tax Plan (all week)

The key question for investors this week is: will they get a Christmas gift from president Donald Trump? They do hope so. Following weeks of struggles and hike-stake votes the final bill is nearly there and is about to be voted. The House is an easy part, the most tricky vote will be Senate where only 2 votes can be lost for the bills to pass and some Senators have some objections. In the US politics compromises are often struck in the final minute but as a failed attempt of Obamacare repeal showed – it doesn’t always work. If Senate can pass the final bill, president Trump can sign it this year, providing the US economy a fiscal boost and paving the way for more interest rate increases next year. Affected markets: EURUSD, US30.

Data from US (Home sales on Wednesday, PCE inflation on Friday) and Canada (sales and inflation on Thursday)

The US data mix is becoming familiar to investors: strong business confidence, healthy consumer, low unemployment and disappointing inflation that limits scope for Fed’s response. The Fed aims at the PCE inflation so Friday’s data will be the last key release from the US this year. In Canada the central bank needs more reasons to return to rate increases. Data on inflation and sales could be decisive in terms of how the CAD is going to close this year. Affected markets: USDCAD.

Riksbank meeting (Wednesday, 8:30am GMT)

This time the Swedish Riksbank has a comfort of knowing a decision of the ECB before deciding on its own. It could also have been assured by a pick up in inflation to 2%. Although few expect the Bank to depart from the ultra-low rate policy for now, even slightest signs of confidence could be useful for the krona. As it happens, EURSEK is stuck at 10 which is an upper band of a multi-year consolidation. Will traders find reasons to become bullish on SEK again? Affected markets: EURSEK, USDSEK.

 EURUSD rebounded from local support. Bulls could aim at 1.1852 now. Source: xStation5