November 26, 2019
US Stocks rebounded on Friday after President Trump stated he is “very close” to a trade deal with China. The British pound fell 0.7% against the US dollar after November’s PMI data signalled deeper contraction in the manufacturing and service sectors with investors also becoming more cautious ahead of December General Election. The Aussie dollar was pressured on Friday following improved US data with US manufacturing PMI posting above the the 51.5 forecast at 52.2.
Australia:RBA Deputy Gov Debelle and Gov Lowe Speak, Private Capital Expenditure and New Home Sales figures are released; US: 2nd estimate of Q3 GDP growth, personal income and outlays, PCE prices, durable goods and new and pending home sales; Eurozone: Germany retail sales, consumer and business confidence figures are released; Rest of the World: China NBS PMIs and industrial profits; Japan industrial output, retail sales and consumer confidence figures all feature across this week.
It is fairly light on the data front this week for Australia.With not much domestically to influence AUD it will be left to other data releases across the globe to dictate its performance. The headline act this week for Australia will be a speech from the RBA’s governor Philip Lowe entitled “Unconventional Monetary Policy: Some Lessons from Overseas”. The speech will be taken as guidance about the RBA’s thinking in relation to quantitative easing, negative interest rates, and other forms of unusual policy. Other important releases which could impact AUD include New Home Sales and the quarterly Private Capital Expenditure figure seen as an important indicator of economic health in the region.
US markets and US data improved last week. The combination of renewed trade talks between the US and China and the release of positive data helped push the greenback higher. Manufacturing PMI posting above the the 51.5 forecast at 52.2 and stronger Consumer Sentiment numbers and Non-Manufacturing figures also helped promote USD strength. It’s a big week for the US dollar with Q3 GDP growth, personal income, PCE prices, durable goods and new and pending home sales all set to feature.
UK Public Sector Net Borrowing for October increased to £10.5 billion, above the £8.6 billion market expectation. The Labour Party (opposition party) manifesto was released Thursday last week and has been criticized as unworkable. Analysts have suggested that the UK economy could crash if Labour were to be elected, and overseas investment would seek to find other places to invest. If the electorate decides it is time to change from a Conservative government, this will bring excessive volatility for GB. Only second tier data features this week for the Pound and the direction of Sterling will be dictated by political and Brexit related events.
Europe saw an improvement in manufacturing numbers on Friday. The Euro moved higher against the US dollar and the ECB’s De Guindos closed a quiet day of trading by saying the “risks still remain to the downside.” for the single currency. Newly elected ECB President Lagarde also made her first major speech on monetary policy. Later tonight will see the release of German Ifo business confidence numbers which will provide details on European growth.
Rest of the World
Bank of Canada (BoC) Governor, Poloz, said monetary policy was “about right”, and as such any thoughts about rate cuts were reduced again. Oil prices have rebounded, helping to boost demand for commodity currencies like the CAD and NOK.
EUR – German Ifo Business Climate
NZD – Retail Sales
AUD – RBA Deputy Gov Debelle Speaks
AUD – RBA Gov Lowe Speaks
EUR – German GfK Consumer Climate
USD – Richmond Manufacturing Index
USD – New Housing Sales
USD – Consumer Confidence
NZD – RBNZ Financial Stability Report
NZD – RBNZ Gov Orr Speaks
USD – Durable Goods Orders
USD – Prelim GDP
USD – Unemployment Claims
USD – Chicago PMI
USD – Personal Spending
USD – Core PCE Price Index
USD – Crude Oil Inventories
USD – Beige Book
JPY – Retail Sales
NZD – ANZ Business Confidence
AUD – Private Capital Expenditure
CAD – Current Account
EUR – German Prelim CPI
JPY – Unemployment Rate
JPY – Industrial Production
JPY – Consumer Confidence
AUD – HIA New Home Sales
AUD – Private Sector Credit
GBP – GfK Consumer Confidence
EUR – German Retail Sales
EUR – Unemployment Rate
EUR – CPI Flash Estimate
CAD – GDP
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