U.S. consumer confidence -- Today’s preliminary Dec U.S. consumer confidence index from the University of Michigan is expected to rise by +0.7 points to 89.5, adding to November’s rise of +1.9 points to a 7-1/3 year high 88.8. If today’s consumer confidence report shows an increase from November, then U.S. consumer confidence in early December will have pushed to a new 7-1/3 year high in the heat of the holiday shopping season. U.S. consumer confidence is currently at the highest level since July 2007, which was five months before the 2007/09 U.S. recession officially began in Dec 2007. Yesterday’s stronger-than-expected Nov retail sales report of +0.7% and +0.5% ex-autos was an encouraging signal for holiday shopping sales.
U.S. PPI -- The market is expecting today’s Nov final-demand PPI report to fall to +1.4% y/y from +1.5% y/y in October. However, excluding food and energy, the market is expecting today’s Nov final-demand core PPI to be unchanged at +1.8% y/y from October. The plunge in gasoline prices seen over the past five months is obviously going to have a big impact on the headline U.S. CPI, PPI and deflator figures, meaning the Fed will have to pay more attention to the core figures to gauge what is really going on with inflation from a monetary policy standpoint.