This week marks the last "Super Central Bank Week" of the year.

More than 20 central banks, including the Federal Reserve, the Bank of England, and the Bank of Japan, will successively announce their interest rate decisions.

In addition to the interest rate decision in the USA, China's November economic data is also closely watched by the Capital Markets.

1. On December 16 (Monday), China will announce several economic data for November.

2. On December 19 (Thursday), the Federal Reserve's interest rate decision will be announced.

China's economic growth data will provide the market with the latest dynamics of the Chinese economy, while the United States' interest rate decision will influence the direction of Global monetary policy.

Focus 1: China's November economic data

The National Bureau of Statistics of China will release the retail sales data of social consumer goods and the industrial value-added data above the designated size for November on December 16 (Monday). The market generally expects retail sales of social consumer goods to grow by 4.6%, while the value-added of industrial enterprises above a designated size is expected to grow by 5.3%.

These data involve the latest Indicators of China's economic growth and will provide investors with the latest guidance, especially in the context of the top-level meeting proposing to stabilize the real estate and stock markets, prevent and resolve key area risks, and external shocks.

The top-level meeting that concluded last week also emphasized the importance of strengthening unconventional counter-cyclical adjustments. This is the first change in monetary policy stance since 2011, showing the decision-makers' emphasis on stable economic growth.

In addition, the Central Economic Work Conference also emphasized the importance of implementing more proactive macro policies, expanding domestic demand, and promoting the integration of Technology innovation and industrial innovation. These policy trends will have a positive impact on market sentiment.

Focus 2: Federal Reserve Interest Rate Decision

The Federal Reserve will announce its interest rate decision on December 19 (Thursday) at midnight, and the market is widely concerned about whether the Federal Reserve will announce a rate cut and the future direction of monetary policy.

The Data released by the USA Bureau of Labor Statistics on December 11 showed that the USA's unadjusted CPI in November rose by 2.7% year-on-year, in line with market expectations, which provides room for the Federal Reserve's rate cut decision.

According to the CME Group "Fed Watch" statistics, the probability of the Federal Reserve lowering interest rates by 25 basis points in November is 96%, while the probability of keeping the interest rate unchanged at 4.75%-5.00% is 4%.

Goldman Sachs Analyst Whitney Watson stated that the CPI data has cleared the obstacles for next week’s rate cut. The Federal Reserve remains confident in the progress against inflation and expects that in the new year, the Federal Reserve will gradually relax monetary policy further.

If this expectation is realized, it will have a profound impact on the Global Capital Markets, especially against the backdrop of the current slowdown in Global economic growth.

Will the People's Bank of China soon reduce the reserve requirement ratio?

On December 14, at the 2024-2025 China Economic Annual Meeting held at the China International Economic Exchange Center, Wang Xin, director of the Research Bureau of the People's Bank of China, stated that monetary policy support should be appropriately increased, with timely reductions in the reserve requirement ratio and interest rates, and intensified monetary Crediting.

China International Capital Corporation stated that to cooperate with government bond issuance, Crediting, and seasonal liquidity demands, a reduction in the reserve requirement ratio may be implemented before the Spring Festival, and interest rate cuts may also gradually proceed with the Federal Reserve's rate cuts.

Institutions expect that next year the central bank will cut interest rates by 30-50 basis points. On one hand, the cumulative year-on-year GDP deflator index recorded -0.7% in the first three quarters of this year, remaining in the negative range, and the real interest rate level is still relatively high; on the other hand, the expansion of developers' and local governments' balance sheets and credit expansion is relatively weak, allowing further room for a decrease in funding costs.

Are the Global central banks collectively turning?

At 10:00 AM Beijing time on December 18, the central banks of Thailand and Indonesia will announce their interest rate decisions.

On December 19, the Federal Reserve, the Central Bank of the Philippines, the Swedish Central Bank, the Norwegian Central Bank, the Bank of Japan, and the Bank of England will announce their interest rate decisions.

On December 20, the central banks of Russia and Mexico will announce their interest rate decisions.

Current market mainstream predictions lean towards the Federal Reserve implementing a 25 basis point rate cut, while the Bank of England and the Bank of Japan may keep their existing interest rates unchanged.

Several Analysts on Wall Street believe that as economic data continues to show that inflation issues are basically under control, central banks around the world no longer need to maintain high restrictive interest rates.

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Editor/Rocky