Euro zone service sector PMI readings for December are unlikely to alter European Central Bank thinking about taking the ultimate policy leap and commencing a quantitative easing government bond-buying programme, possibly at its Jan. 22 meeting.
German inflation figures for December will presage the euro zone number on Wednesday, together offering one of the final pieces of the jigsaw for the European Central Bank before its late January policy meeting at which it could commence a quantitative easing government bond-buying programme.
The last day of the year and all is quiet – but not for long.
Unless the price of oil bounces markedly or Vladimir Putin walks away from Ukraine thereby loosening western sanctions – both unlikely – Russia could be heading for a serious economic fall. Reserves are being burned defending the currency. They are sufficient for now but without hefty tax increases, public spending cuts and/or a higher pension age the outlook for 2016 and beyond is much gloomier.
Trying to predict the rouble’s path is a fool’s charter but it’s fairly safe to say it won’t return to a level that will take pressure off the Russian economy. It has opened 2 percent higher versus the dollar in Moscow this morning, mirroring a rise in oil from $60 a barrel.