• MON: Riksbank Minutes (Nov); EZ Sentix Index (Dec); Japanese GDP (R/Q3); Chinese Trade Balance (Nov).
• TUE: EIA STEO; Norges Bank Regional Network Report (Q4); EZ Employment (F); GDP German ZEW Survey (Dec)(R/Q3).
• WED: BoC Policy Meeting; BCB Policy Meeting; Chinese Inflation (Nov); German Trade Balance (Oct)
• THU: ECB Policy Meeting; US FDA Covid EUA Meeting; EU Council Meeting (Thu-Fri); UK GDP (Oct), Output Data (Oct), Trade Balance (Oct); US CPI (Nov).
• FRI: US Government Budget Deadline; EU Council; German CPI (F/Nov); US University of Michigan Survey (Dec, P).

CHINA TRADE DATA (MON): Analysts are looking for a continuation of the recent streak of firm data from the world’s second largest economy. Trade data has been mixed of late, including the most recent data for October, which showed a larger than expected trade surplus, while exports increased by the most in 19-months, although imports disappointed. The surge in exports was attributed to the continued recovery in China and firm demand for medical supplies, as well as a shift in orders as other countries experienced reduced capacity due to the pandemic impact on supply chains. Some expect Chinese exports to remain underpinned for the remainder of the year on increased demand heading into Christmas, and with US and Europe still struggling with the pandemic.

RIKSKBANK MINUTES (MON): To recap the prior meeting, expectations were split on whether the Riksbank would alter asset purchases at this point or wait for clarity as to what exactly the ECB's liquidity boost will look like (ECB meets on December 10th, and is expected to loosen policy further). The Riksbank elected to increase purchases by SEK 200bln (to SEK 700bln) and extended its purchase horizon to end-2021(from H1-2021). However, bolstering liquidity measures in this manner drew dissent from Breman and Floden, who called for an SEK 100bln extension and to delay the decision on altering the size of purchases until a later date. Given this, the minutes will draw greater scrutiny for the views of other rate-setters as will the aftermath of the ECB gathering to see if the Riksbank's 'pre-emptive' strike was justified in that respect. Somewhat surprisingly, the RIksbank did not explicitly mention the SEK currency in its statement; an area that was expected to draw some focus in light of the marked appreciation between meetings. Finally, the forecasts essentially saw downgrades across the board for both CPIF and GDP; Nordea judge these to be somewhat excessive downgrades, although, as with all forecasts at this stage, they are subject to substantial uncertainty and could well be revised once the medium-term picture becomes clearer.

NORGES BANK REGIONAL NETWORK SURVEY (TUE): At last month's meeting, the Norges Bank opted to stand pat on rates as expected, whilst acknowledging the impact of Covid. The Norges Bank stopped short of offering much more in the way of specifics given that it was an intra-MPR meeting which typically are not the platform for the Bank to launch a re-evaluation of its policy stance. As such, attention turns towards the upcoming Regional Network Survey; Nordea expects that current situation indicator will print around 0, with companies likely to report "somewhat softer activity during the past three months as containment measures have affected their output". For the forward-looking metric, the key will be how much of the latest vaccine announcements has been factored into the outlook. However, given the typical survey period, it is possible that the upcoming report will not tell the full story.

CHINA INFLATION (WED): Analysts will be looking for Chinese CPI to recover in November, after the slowdown seen in the prior month, which was the slowest pace of increase since 2009. This alluded to a weak consumer profile, although it was mostly due to food prices, including a decline in pork prices for the first time in 19-months that had previously been underpinned from the impact of the African swine fever; Capital Economics suggests that consumer price inflation could drop back further in the near-term as pork supply continues to recover. The latest producer price index is also due for release, and is likely to remain subdued despite the recovery seen in the Chinese economy, since PPI has printed in negative territory for nearly every month so far this year aside from February.

BOC MEETING (WED): The BoC is expected to keep its benchmark rate unchanged at 0.25%, its QE programme untweaked at CAD 4bln per week, and no changes are expected to its forward guidance. The main focus for policy is the pandemic with restrictions and lockdowns in certain areas of Canada reminding that the short-term will remaining challenging. Canadian bank RBC notes that this contrasts with the medium-term, where positive vaccine developments since the BoC's previous meeting in October have brightened the medium-term view. RBC also makes the point -- as many other global central bankers have, of late -- that fiscal policy is in a better position to support the economy, as the Governor recently alluded to in remarks to lawmakers. Nevertheless, the BoC may be encouraged by the recent GDP data which showed a solid rebound, as well as favourable revisions to previous data. While the meeting itself is expected to be a ho hum affair, the Deputy Governor will be delivering the BoC's Economic Progress Report on Thursday.

BCB MEETING (WED): There is not yet an analyst consensus which has been published for Wednesday's BCB meeting; however, it cut the Selic by 25bps in August, and hinted that it could take further action to ease policy ahead, although it held rates in September and October. With that said, it noted that the room for adjustment was limited. Credit Suisse argues that BCB communications indicate that its base case scenario is that August’s cut was the end of its easing cycle, with a small bias towards another cut of 25bps in future meetings. CS maintains its call that the Selic will remain at current levels through the first half of next year.

US CPI (THU): The street expects US CPI to rise by 0.1% m/m in November, although the y/y rate is seen falling by 0.1ppts to 1.1%; the core rate is seen rising 0.1% m/m too, and the annualised core measure is seen paring by 0.1ppts to 1.5%. UBS notes that gasoline and diesel prices in the month suggest energy inflation was little changed in the month, while home prices have not deviated much from October levels. Regarding the core measures, UBS thinks that weakness will be concentrated in the rents category (which make up about 40% of the core category); UBS expects the trend in these components to remain soft into next year, and notes that when a similar jump occurred in July it was followed by a resumption of weakness in August and September, and its forecast is looking for that to happen again this time around. Elsewhere, rising Covid cases are likely to slow increases in demand for travel and hold back airfares and lodging away from home prices, UBS says, while medical insurance prices are seen remaining weak; "In all we expect to see modest or no monthly inflation in the core CPI though the first few months of next year," the bank writes, adding that "the monthly weakness should lead the 12-month inflation rate to turn down over the next few months."

ECB MEETING (THU): After announcing in October that policymakers will recalibrate monetary instruments at the December meeting, amid the ongoing fallout from Covid, markets have continued to build-up expectations of a comprehensive easing package next week. With President Lagarde noting that data suggests a softening of activity in Q4 and the EU’s Recovery Fund yet to be signed off by EU leaders, monetary policymakers will once again need to come to the table to support the Eurozone economy. Consensus looks for the Bank to stand pat on the deposit rate, the main refi rate and marginal lending rate (-0.5%, 0.0% and 0.25% respectively). A recent research piece from the Bank noted that the reversal rate for the deposit rate stands at around -1%, suggesting there is some 50bps of space until further rate reductions could become counterproductive. That said, whilst all options are said to be on the table and it could help stem some of the recent EUR appreciation, commentary from central bank officials has done little to suggest that such a move is on the cards. On the EUR, President Lagarde and Chief Economist Lane recently passed on the chance to talk down the EUR after it breached 1.20 to the upside once again, as such, the statement may well see a reiteration of existing commentary on the exchange rate rather than anything more explicit. With the balance sheet seen as the preferred easing tool for the Governing Council, focus remains on any adjustments to its bond-buying operations. Its PEPP currently has an envelope of EUR 1.35trl and is set to run at least until the end of June 2021, whilst its regular Asset Purchase Programme runs at a monthly pace of EUR 20bln together with the purchases under the additional EUR 120bln temporary envelope until the end of 2020. A Reuters survey of economists stated that expectations are for a EUR 500bln addition to the PEPP programme and 6-month extension until December 2021; policymakers have suggested that a 12-month extension is under consideration. UBS also expects the ECB to extend its commitment to reinvesting the principal of maturing securities purchased under PEPP by another year, from currently end-2022 to end-2023. Note, 33 of 44 economists surveyed said the ECB would not expand its PSPP. Additionally, the prospect of including "fallen angels" within its Corporate Sector Purchase Programme (CSPP) lingers; however, this idea recently received a pushback from outgoing hawk Mersch. On TLTROs, which continue to be talked up by Bank officials, UBS expects the central bank to extend the facility from March 2021 to mid-2022 via the addition of a new series of quarterly auctions. The Swiss bank does not expect a sweetening of the terms of the operations, but it has raised the possibility of the ECB increasing banks' borrowing allowances. Another option for the ECB could be an adjustment to the existing tiering multiplier of six (exempt from negative interest rates) amid rising levels of excess liquidity, something which ING has factored into its base case. The accompanying staff economic forecasts (the cut-off for which was prior to the recent pick-up in EUR appreciation) could see an upgrade to 2021 and 2022 growth prospects amid recent vaccine developments, whilst ING looks for minor adjustments to inflation forecasts, with greater focus instead on the first release of the 2023 projection and how close it is to the 2% target.

UK GDP (THU): Consensus looks for a 0.5% M/M expansion for October GDP compared to the 1.1% growth seen in the prior month. However, consensus is relatively mixed with a range in analyst expectations of -0.7% to +0.7%. At the bottom end of that range is RBC, which premises its forecast of a 0.7% contraction on the basis that the tiered restriction system imposed in the UK on October 14th had already impeded growth ahead of the national lockdown that came into effect on November 5th. The Canadian bank also references the October services PMI release which fell from 56.1 in September to 51.4, with survey compiler Markit noting that "October data indicates that the UK service sector was close to stalling even before the announcement of 'Lockdown 2' in England, with tighter restrictions on hospitality, travel and leisure leading to a slump in demand for consumer facing businesses". Given the more stringent measures imposed in November, the print for this month could garner greater attention than the upcoming release, on which, RBC pencils in an 8% m/m decline.

EU COUNCIL MEETING (THU-FRI): European leaders are poised to meet on December 10-11th to discuss a range of topics including Brexit (currently not formally on the agenda), the EU budget/recovery Fund, Covid, geopolitics, and climate change. A Euro Summit will also take place on December 11th, focusing on the banking union and the capital markets union. In terms of where we stand (at the time of writing) on Brexit, an EU official said a Brexit deal was "imminent" barring any last-minute breakdown in talks, although a spokesperson for UK PM Johnson remarked that there are still issues to overcome. Further, France is reported to have told EU negotiator Barnier that a Brexit deal risks being vetoed if it gives in to UK demands. Meanwhile, the European Recovery Fund continues to be threatened by vetoes from Hungary and Poland amid the Rule of Law mechanism. Poland stated would be ready to drop its veto on the condition that the Commission endorses a declaration on the rule of law (i.e. a clear statement Council will not use rule of law to exert unjustified pressure), something Hungary is not supporting (NOTE: Poland PM later said he was not changing his position on the budget). As a possible 'solution', reports have suggested that Brussels is mulling ways to push ahead with the recovery package without the participation of the veto-countries, although MEP Weber highlighted this was a plan B. Reports last month also suggested the dispute could head to the European Court of Justice. Elsewhere, EU-Turkish relations will likely be a prominent topic in the upcoming meeting, with the overriding issue likely to be whether to impose sanctions on Turkey for its Eastern Mediterranean policy and maritime violations. “The Council already agreed at the beginning of October that the EU would latest at its December meeting make use of the full panoply of sanctions available to it if Turkey continued with its unilateral actions and breach of international law,” Euractiv reported.

US GOVERNMENT FUNDING (FRI): Lawmakers are yet to agree funding measures before the 11th December deadline to avert a fresh government shutdown; given that short-term growth dynamics are challenged – and the most recent US government shutdown (which lasted for five weeks) cut 0.1% from Q4 2018 growth and 0.2% from Q1 2019 growth – investors will be concerned about any further knocks to the growth profile. Lawmakers are making the right noises, which may explain why the market's approach has been sanguine, perhaps also distracted by fiscal stimulus talks where negotiations have seemingly restarted once again. US House Speaker Pelosi and Senate Majority Leader McConnell this week spoke on both stimulus and a deal to avoid a government shutdown, and both expressed a shared commitment to completing an omnibus spending bill and Covid relief as soon as possible, according to a spokesperson for the Speaker. McConnell also noted hopeful signs for reaching a relief agreement before the end of the year – what level of stimulus will come remains to be seen; President-elect Biden has said that the USD 908bln bipartisan plan for stimulus was a starting point, hinting that he would want to pursue more fiscal largesse in addition to this amount; however, McConnell continues to shoot around the USD 500-600bln mark, according to reports this week, perhaps influenced by the Georgia Senate run-offs which are to take place 5th January – McConnell will not want to award Democrats with any cheap wins, or appear to be too fiscally liberal.