November 26, 2019

Market Outlook

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.


Week Ahead

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.


Event Wrap


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




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