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Daily Agenda: The Week Ahead, December 14 – 19, 2015

Markets anticipate Fed hike; GOP debate sets stage for more controversial rhetoric; Star Wars returns to screens with a new episode.

Despite a nearly universal expectation for a Fed hike this coming Wednesday, a disappointing follow through from European Central Bank president Mario Draghi on promises to support growth at all cost has cooled expectations for euro-dollar parity. The last full week of trading in the U.S. and Europe in 2015 rounds out with the latest release from the Star Wars franchise, granting an escapist attraction for science fiction fans anxious to block out terrestrial conflict for a couple of hours or so.

Monday, December 14: After an increase in accommodative measures by the European Central Bank that disappointed markets, October euro zone industrial production numbers from Eurostat will provide more insight into the challenges that face ECB policymakers. The most recent purchasing managers’ index data from Markit has indicated that so far the November terrorist attacks in Paris have not undermined confidence among continental manufacturers.

Tuesday, December 15: The U.S. Republican Party hosts its next presidential candidate debate at Las Vegas hotel The Venetian, with CNN anchor Wolf Blitzer acting as moderator. According to CBS/New York Times poll numbers for December 4–8, Donald Trump still leads the pack, polling at 35 percent, with Ted Cruz taking the No. 2 spot with 16 percent.

Wednesday, December 16: Futures markets are now factoring a Federal Open Market Committee as a near inevitability, with contracts on a 25 basis point increase resulting from the Wednesday Fed meeting trading at an implied better than 85 percent likelihood. In testimony before Congress this past week, Federal Reserve chair Janet Yellen reiterated that the Fed’s intention is for a gentle and gradual increase in rates.

Thursday, December 17: IFO Business Climate data is expected to show that sentiment among business leaders in Germany continues to improve. In its most recent economic forecast, released at the beginning of December, the Deutsches Bundesbank, Germany’s central bank, stated that it anticipates a long-term gain from the current influx of Syrian refugees that will offset short-term expenses.

Friday, December 18: The Bank of Japan makes its monthly monetary policy announcement. This past week the Cabinet Office revised GDP figures that indicated that the Japanese economy narrowly avoided recession during the third quarter, though some investors are still wagering that BoJ policymakers may expand its historic easing program.

Saturday, December 19:  Movie fans will be packing theaters this weekend to see Star Wars: The Force Awakens. Industry analysts anticipate that this latest installment in the celebrated sci-fi franchise may eventually beat the current $1.6 billion box office sales record. Despite such high expectations, the January 2016 release in China is only expected to take in as little as $23 million on the first day, as China gets acquainted with the Force for the first time on the nation’s screens since the release of the original Star Wars movie in 1977.

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