Monday 16 December
– Bank of England annual stress tests of leading UK banks
AJ Bell investment director Russ Mould said: “All seven lenders scrutinised in 2018 passed the Bank of England’s stress tests and Barclays, HSBC, Lloyds, RBS and Standard Chartered, as well as Santander and the Nationwide Building Society, will be looking to prove their resilience again this year – not that it has done the share prices of the quoted banks much good.”
All of the quoted lenders have built up their capital buffers and leverage ratios, Mould added.
– Sports Direct interim results
– Bank of England Financial Stability Report
Tuesday 17 December
– US capacity utilisation
This is a measure of the manufacturing sector’s actual output as a proportion of maximum potential output where a falling number indicates excess capacity and insufficient demand leading to a fall in prices/inflation.
Canaccord Genuity investment manager Sam Buckingham said: “The index has drifted downwards over the past 12 months with the manufacturing sector struggling, peaking most recently at 79.6% to its current 76.7% level. Forecasts for November are for a rebound back up to 77.4%.”
– UK unemployment and wage growth data
Wednesday 18 December
– UK inflation figures
Thursday 19 December
– Bank of England and Bank of Japan interest rate decisions
Mould said: “Neither the Bank of Japan nor the Bank of England are expected to make any changes to policy, although there may be a chance that the Bank of England looks to act in the wake of the general election result, just as it did following the EU referendum back in June and August 2016.”
Buckingham said since the last meeting, Shinzo Abe has launched a substantial $121bn fiscal stimulus package to be spent over 15 months in an effort to repair typhoon damage, upgrade infrastructure and invest in new technologies. “This will be welcome news for the BoJ, who is running out of tools to stimulate the economy and inflation solely by monetary policy.”
– UK retail sales figures
Friday 20 December
– Final reading for US Q3 GDP
According to Buckingham, this should remain unchanged at 2.1% on an annualised basis. Looking beyond Q3, however, the slowdown is expected to continue, with Bloomberg Economics forecasting growth to decelerate to 1.7% in Q4.
“There are further warning signs for the economy with another potential US government shutdown on the horizon. The Republicans and Democrats are nearing a deadline to pass their spending bills to fund the US federal government, complicated by the fact they are also voting to impeach President Trump this week.”
– Final reading for UK Q3 GDP
