Swiss Producer & Import Prices (NOV) (08:15 GMT; 03:15 EDT)
                          (MoM)                    (YoY)
Consensus:          0.0%                     2.8%
Previous:             -0.1%                     2.4%

Outlook: Inflation at the factory and the import level are expected to follow in the footsteps of the consumer price index before it and mark a stagnant monthly read and acceleration over the year.  Economists’ draw their expectations of an unchanged monthly report directly from the CPI report for the same period.  Further down the supply chain, positive price pressures were felt within consumer-related components.  Clothing sales grew 2.0 percent in November while housing related costs rose 1.6 percent.  Aside from these advances though, inflation was limited.  In fact, in groups more closely aligned with imports and factories, downward pressure is factoring in greater expectations for weakness in the price gauge.  Transportation equipment investment for the period slipped 0.4 percent while petroleum products fell 2.3 percent.  Even if inflation in these sectors falls short of expectations, the SNB is still predicted to move ahead with normalizing interest rates.  The central bank’s policy group has made it clear that it would preempt inflation rather than wait for current gauges to catch up.

Previous: The Swiss Producer and Import Price Index fell less than expected in October.  Prices for imports and farm and factory goods slipped 0.1 percent through the month while decelerating for the second consecutive in the annual calculation.  From the breakdown, the changes were varied.  From the import group, the decliners were led by a 10.8 percent drop in mining related production and a 8.1 percent slide in petroleum productions.  However, there were a few positive outliers for the positive side. Costs for metal-based goods rose 1.2 percent while those for wood accelerated 2.9 percent.  From local factories, the changes were in similar groups. Despite the cooling in this leading inflation indicator, the SNB decided to stick to its quarterly diet of 25-basis point rate hikes.  On December 14th, the central bank monetary policy group announced a boost in the overnight cash to 2.00 percent.

New Zealand GDP (3Q) (21:45 GMT; 16:45 EDT)
Consensus:         0.5%
Previous:             0.5%

Outlook: Economists predict New Zealand’s $108 billion economy grew 0.5 percent through the three months ending on September.  Such a pace would boost the annual growth rate up to 1.7 percent, what would be the slowest pace of growth in over 7 years.  If both of these rates are met, both would be behind the projections RNBZ Governor Alan Bollard put out.  However, the modest expectations are not expected to jeopardize plans for the central bank to raise the overnight lending rate in an effort to cool consumer-driven inflation that has held consistently above the policy body’s one-to-three percent governed range. This contingency falls to the performance of consumer activity.  Third quarter statistics have already set the tone aggressive spending in the consumer sector. In the third quarter, the unemployment rate held low at 3.8 percent while wages in turn grew 3 percent.  Furthermore, retail sales grew for the fifth consecutive month through September to suggest the greater level of earnings were not necessarily going into savings accounts.  Aside from the consumer sector, housing and export performance will also play a role in overall growth.  Housing prices through the same period swelled 5.1 percent, as a consequence of and contributor to consumer spending.  Trade, on the other hand, is finding mixed sentiment.  Though goods exports have risen a total 5.2 percent over the period, the current account deficit through the same period grew 16.6 percent.  Though growth in itself is important for any economy, the market will respond to New Zealand’s GDP print a little differently if it is not too far off the market.  A quick breakdown by the market will lead to interpretations of the key inflationary components that would drive Bollard to another rate hike.

Previous: Economic expansion in the New Zealand economy picked up 0.5 percent in the second quarter, slower than the 0.6 percent projected and the 0.8 percent pace realized in the first three months of the year.  The official growth statistic confirmed what many economists had said was happening in New Zealand:  a stalling economy was meeting high inflation that would create difficulty for any clear monetary policy stance from the RBNZ.  Over the three-month period, the consumer sector was taking the biggest hit, while exports were looking to take up the slack.  Spending in the sector, which accounts for 60 percent of the economy, fell 0.4 percent for the first contraction in two years.  Within the broad data point, household spending slipped 0.5 percent while durable goods sales dropped 0.7 percent.  On the positive side of the balance sheet, exports rallied a hefty 4.7 percent as high prices for many of the country’s natural materials surged to recent historical highs.  Despite the step back in growth for the period, RBNZ Governor Bollard’s rhetoric remained resiliently hawkish, suggesting the next move in rates would be a hike rather than a cut.

John Kicklighter is a Currency Strategist at FXCM.