Bank of Japan Headquarters, Tokyo
Pictured is the Bank of Japan headquarters in Tokyo. Reuters

In the U.S., manufacturing and housing-related reports will dominate this week’s economic calendar. And on Thursday, third-quarter gross domestic product should be revised up to 2.8 percent from 2.7 percent.

Meanwhile, U.S. fiscal cliff negotiations roll on. Paul Dales of Capital Economics thinks the current Congress probably won’t be able to reach a deal by Friday, Dec. 21. “But we expect negotiations to continue nonetheless and they may even spill over into the new Congress, which begins in early January,” Dales said.

Sunday’s election has returned the Liberal Democratic Party of Japan to power after a three-year absence. The landslide victory may influence whether the Bank of Japan steps up QE on Dec. 20.

The Bank of Japan is widely expected to take further steps to boost liquidity. “We expect the BoJ to ease further at its Dec. 19-20 policy meeting by expanding its asset purchase program by ¥10 trillion,” said Masayuki Kichikawa, Tokyo-based chief economist at Bank of America Merrill Lynch, in a note. “High economic and political risks make it likely that the BoJ will ease further in such a very short time frame.”

On Wednesday, South Koreans will head to the polls to elect a new president, the country's sixth since democratization.

Despite the political differences between the two frontrunners, their economic policies have much in common. As such, economists think the election result will matter relatively little for the economic outlook.

In emerging markets, central banks will meet in India, Hungary and Colombia.

Below are entries on the economic calendar between Dec. 18 and Dec. 21. All listed times are EST.


8:30 a.m. – Current account deficit likely narrowed to $103.5 billion in the third quarter, largely thanks to a decline in the cost of imported oil. The second-quarter deficit should be revised down by about $2 billion as well.

10:00 a.m. – The 27- point surge in the NAHB Index in the year to November was the strongest in the history of this index. With orders at the largest homebuilders still rising, and housing supply still tightening, economists thin the National Association of Home Builders sentiment will continue to push towards the 50 “neutral” mark. December’s reading is expected to come in at 47, compared with November’s 46.

1:15 p.m. -- Dallas Fed President Richard Fisher (FOMC non-voter) speaks on the economy in Gainesville, Texas.


Australia -- RBA board minutes.

India -- RBI repo rate and reverse repo rate.

Sweden -- Interest rate announcement.

Portugal -- Finance Minister Vitor Gaspar speaks at a parliamentary commission monitoring the measures of Portugal's financial aid program.

Turkey – Benchmark repo rate, overnight lending rate and overnight borrowing rate.

Hungary – Deposit rate.

U.K. – November CPI, input prices and output prices.

Japan – November trade balance.


7:00 a.m. -- The Mortgage Bankers Association's (MBA) Mortgage Index for the week ending Dec. 14.

8:30 a.m. – Economists forecast housing starts to fall to 870,000 in November from 894,000 in October. The data will likely still reflect distortion from Superstorm Sandy. Building permits likely rose to 875,000 last month from 868,000 in October.


France -- Presentation of a bank reform bill to the cabinet.

U.K. -- MPC minutes, bank rate vote and asset purchase vote for December.

Czech -- Repo rate announcement for December.

Norway – Interest rate announcement for December.

Germany – December IFO business climate index, current assessment index and business expectations index.

New Zealand – Q3 GDP.


8:30 a.m. – The final released of Q3 GDP will likely show growth of 2.8 percent, up from the second release of 2.7 percent and the initial estimate of 2 percent. The upward revision will be concentrated in non-residential structures investment and trade.

8:30 a.m. – Economists predict initial jobless claims to bounce back up to 355,000 during the week of Dec. 15, after plunging to 343,000 the week before.

10:00 a.m. – The Conference Board’s index of leading economic indicators will likely show a contraction of 0.2 percent in November, after a 0.2 percent gain in the prior month. While consumer confidence continued to improve in November after weighing significantly on the index for most of the year and interest rate spreads remained supportive of growth, these were more than offset by a spike in jobless claims due to Superstorm Sandy.

10:00 a.m. – Existing home sales probably registered 4.85 million units in November, up from 4.79 million in October.

10:00 a.m. – Economists look for the FHFA Home Price Index to rise 0.5 percent in November, consistent with the improvement seen in other home price indices during the same time period. This would translate into a year-on-year increase of 5.7 percent.

10:00 a.m. -- Last month, the Philly Fed index fell sharply to -10.7 from +5.7. Superstorm Sandy was the primary driver of the decline in the Philly Fed. Many businesses in the region were affected by power outages and storm damage that hurt business output. As the region returns to normal, manufacturing activity should accelerate. Economists look for the Philly Fed to rise to -2.5 in December.


Japan – December BoJ target rate.

U.K. – November retail sales.


8:30 a.m. -- Powered by a projected snapback in private wage and salary disbursements, personal income probably climbed by 0.3 percent in November, after no change in the preceding month. Reflecting reported surges in unit vehicle sales and a sharp acceleration in retail “control” purchases, nominal personal consumption expenditures (PCE) likely climbed by 0.4 percent last month, more than offsetting the Superstorm Sandy induced 0.2 percent dip posted in October. In real terms, consumer spending probably jumped by 0.6 percent – the largest one-month rise since August 2009. Core PCE prices are likely to increase 0.1 percent, leaving the year-on-year rate at 1.55 percent.

8:30 a.m. – Durable goods orders are expected to rise 0.3 percent in November, following a 0.5 percent increase in October. Backing out the volatile transportation sector, economists expect durable goods orders to remain flat in November, following a gain of 1.8 percent in the prior month. Core capital goods orders, which is a proxy for future capex, is expected to rise by 0.4 percent.

8:30 a.m. -- The Chicago Fed Midwest Manufacturing Index (CFMMI) for November.

9:55 a.m. – Economists look for the final estimate for consumer sentiment, as reported by the University of Michigan, to settle at 74.5, unchanged from the initial estimate and down from 82.7 in November. Fiscal cliff negotiations thus far have yielded little results, leaving many concerned that a resolution will not be reached by year end. Given the increased publicity regarding the severity of the cliff, this political stalemate should weigh heavily on sentiment.

11:00 a.m. -- The Kansas City Fed's manufacturing composite index for December.


Colombia – December overnight lending rate.

U.K. – Q3 GDP, final reading.

Sources: Central banks, European Commission, Reuters, Market News, Capital Economics, Barclays, Bank of America Merrill Lynch, Societe Generale.