Talking Points:

SNB Rate Decision Unlikely to Yield Change in Monetary Policy Stance
US Dollar May Rise if Upbeat Retail Sales Data Drives Fed “Taper” Bets
Aussie Dollar Looks Past Upbeat Jobs Data, Follows Asian Stocks Lower

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A monetary policy announcement from the Swiss National Bank headlines the economic calendar in European hours. Chairman Thomas Jordan and company are not expected to introduce any changes into the policy mix, keeping the baseline rate lending rate as-is and reiterating a commitment to the EURCHF floor at 1.20.

Indeed, while the headline year-on-year CPI inflation rate has come a long way since bottoming at -1.1 percent in June 2012, last month’s print at 0.1 percent seems hardly strong enough to pull back on accommodation. Furthermore, data from Citigroup suggests inflation readings have increasingly underperformed relative to expectations over the past four months.

Later in the day, the spotlight shifts to the US economic calendar, where the week’s first bit of top-tier event risk comes in the form of November’s Retail Sales report. Expectations call for an increase of 0.6 percent, an outcome that would mark the strongest performance in five months. Investors continue to view US news-flow through the prism of Fed QE “taper” expectations.

In that context, a strong result stands to boost the US Dollar while weighing on risk appetite. A preview of this dynamic was on display overnight as the sentiment-geared Australian Dollar looked past a supportive Employment data set to trade lower, mirroring a selloff in Asian equities that reflected fears of an imminent pullback in Fed stimulus after a US budget deal reduced fiscal drag concerns for the next two years.

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Asia Session:

GMT

CCY

EVENT

ACT

EXP

20:00

NZD

RBNZ Interest Rate Decision

2.50%