SHANGHAI, Dec. 17 (SMM) – Attention should be paid to Germany’s IFO business climate index for December and US Philadelphia Fed's manufacturing index for December on Thursday. Markets expect figures from Germany to be stable and thus this will pose little impact on market. Should UK’s retail sales underperform forecast in November, weaker-than-before sales on the first Friday after Thanks Giving Day should be claimed.
US initial jobless claims will likely be below 300,000 for 41 weeks in a row, which will guide US Fed to make a right decision in rate hike path. But US Philadelphia Fed's manufacturing index for December is expected to be disappointing, further mirroring US soft manufacturing industry.
US Fed, as widely expected, announced on Thursday to raise the range of its benchmark interest rate by 0.25 percentage points - its first increase since 2006. And the central bank will lift the IOER rate to 0.5% and the Fed expects that a slow and gradual rate hike path will benefit US economy. As such, US dollar swung heavily. The Fed showed confidence in driving inflation to its 2% target with modest growth in economy and housing market, and balance in outlook for economy and employment.
US Fed President Yellen delivered speech in a cautious tone and noted that US economy remains weak and that there is still downside room for unemployment with limit in labor force participation rate. The President also insisted rate hike path depends on economic figures and loose monetary policies should be continued. Net export in US is dragged down by dollar and outside economic growth and appreciation in dollar poses pressure on inflation, the President added.