Weekly Market Outlook (20-24 November)

UPCOMING EVENTS:

• Monday: PBoC LPR.
• Tuesday:
  RBA
  Meeting Minutes, Canada CPI, FOMC Minutes.
• Wednesday:
  US
  Durable Goods, US Jobless Claims.
• Thursday:
  US
  Thanksgiving Day, Australia/Eurozone/UK PMIs, ECB Meeting Minutes,
  New Zealand Retail Sales.
• Friday:
  Japan
  CPI, Canada Retail Sales, US PMIs, US Black Friday (early markets close).

Monday

The PBoC is expected to keep the LPR rates
unchanged at 3.45% for the 1 year and 4.20% for the 5 years given that the
central bank refrained from any adjustment to the MLF
rate, which is generally a precursor for
the LPR change. Recent economic data has been mixed with PMIs returning in
contraction and the inflation rate falling back into deflation, while activity
data surprised to the upside.

Tuesday

The Canadian CPI Y/Y is expected to fall
to 3.2% vs. 3.8% prior, while the M/M reading is seen at 0.1% vs. -0.1% prior.
The BoC is mainly focused on the underlying inflation measures (Common, Median
and Trimmed Mean) which missed expectations across the board the
last time. Given the softening in the labour
market, a small beat is unlikely to change
anything for the BoC.

Wednesday

The US Jobless Claims missed expectations
across the board once again last
week with Continuing Claims clearly
showing a strong upward trend. This week the consensus sees Initial Claims at
225K vs. 235K prior, while there’s no expectation for Continuing Claims at the
time of writing.

Thursday

Thursday is going to be a low liquidity
day with the US being on holiday for Thanksgiving Day. Nonetheless, we’ll get
the release of the PMIs for Eurozone and UK, which will likely set the tone for
the day:

• Eurozone Manufacturing
  PMI 43.4 vs. 43.1 prior.
• Eurozone Services PMI
  48.1 vs. 47.8 prior.
• UK Manufacturing PMI 45.0
  vs. 44.8 prior.
• UK Services PMI 49.5 vs.
  49.5 prior.

Friday

The Japanese Core CPI Y/Y is expected to
increase to 3.0% vs. 2.8% prior while there’s no consensus for the other
measures at the time of writing. This inflation report is not going to change
anything for the BoJ unless we get some huge surprises. The BoJ’s attention is
on wage growth with the June 2024 spring wage talks in focus.

The day after Thanksgiving is another
holiday for the US with the markets closing early, but we will also get the
latest PMIs which are likely to be market moving. The US Manufacturing PMI is
expected to fall into contraction at 49.8 vs. 50.0 while the Services PMI is
seen at 50.3 vs. 50.6 prior.