ASX200: Weekly Wrap – 12/11/2021

The ASX200

It was a bearish week for the ASX200, which slipped by 0.19% in the week ending 12^th November. In the week prior, the ASX200 had risen by 1.82%.

China and U.S inflation figures ultimately left the ASX200 in the red for the week, with economic data from Australia also weighing.

Upbeat trade data from China and business and consumer confidence figures from Australia failed to prevent the weekly loss.

The Stats

Business and Consumer Confidence

In October, the NAB Business Confidence Index increased from 10 to 21, coming in ahead of a forecasted 15.

According to the October Survey,

• Easing of the latest lockdown measures drove confidence at the start of the quarter.
• Capacity utilization recovered in October, rising back to 81.5%, with forward orders rebounding to +15 index points.
• In September, forward orders had been negative.
• Inflation indicators remained elevated, with purchase cost growth hitting decade highs, with labor costs growth accelerating.

In November, the Westpac Consumer Confidence Index increased by 0.6% to 105.3, partially recovering from a 1.5% fall in October.

According to the latest Westpac Report,

• The lack of a major pickup in confidence came in spite of Sydney and Melbourne easing lockdown measures.
• Higher vaccination rates have continued to support consumer confidence, limiting a material decline in response to the last set of lockdown measures.

Employment

According to ABS,

• The unemployment rate increased to 5.2% from 4.8% in October.
• Employment fell by 46.3k to leave it 160.3k lower than in March 2020.
• Full-time employment declined by 40.4k, with part-time employment down 5.9k.
• The participation rate increased by 0.1 pts to 64.7%.

From Elsewhere

U.S Inflation

U.S Consumer prices rose by 0.9% in October following a 0.4% increase in September.

More significantly, the U.S core annual rate of inflation accelerated from 4.0% to 4.6. Economists had forecast an annual core inflation rate of 4.3%.

Month-on-month, U.S core consumer prices increased by 0.6% following a 0.2% rise in the month prior.

China Inflation

In October, China’s annual rate of inflation accelerated from 0.7% to 1.5% versus a forecasted 1.4%.

Month-on-month, consumer prices increased by 0.7% following a 0.1% rise in September. Economists had forecast a 0.7% increase.

Wholesale inflationary pressures also accelerated. China’s annual wholesale rate of inflation picked up from 10.7% to 13.5%. Economists had forecast an annual rate of 12.4%.

China Trade

China’s USD trade surplus widened from US$66.76bn to US$84.54bn. Economists had forecast a narrowing to US$65.55bn.

• Year-on-year, exports were up 27.7% versus a forecasted 24.5%. In September, exports had risen by 28.1%.
• Imports increased by 20.6%, versus a forecasted 25.0%. Imports had risen by 17.6% in September.

The Market Movers

It was a mixed week for the banks. NAB rallied by 3.25%, with Westpac rising by 0.62% to buck the trend.

ANZ and Commonwealth Bank of Australia slid by 1.88% and by 1.45%, however. Macquarie Group ended the week down by a more modest 0.57%.

Commodity stocks had a bullish week. Fortescue Metals Group Ltd led the way, surging by 10.37%. Rio Tinto and BHP Group ended the week with gains of 3.83% and 4.46% respectively, with Newcrest Mining up 0.84%.

Other Asian Markets

Elsewhere, it was a bullish week for the Hang Seng Index and CSI300, while the Nikkei 225 ended the week flat.

The CSI300 and the Hang Seng Index rose by 0.95% and by 1.84% respectively, while the Nikkei 225 slipped by 0.01%.

The Week Ahead

It’s a quieter week ahead on the Asian economic calendar. From Australia, economic data is limited to 3^rd quarter wage growth due out on Wednesday. With the RBA placing strong emphasis on wage growth, expect the numbers to influence.

At the start of the week, however, industrial production and fixed asset investment figures from China will set the tone.

From the U.S, retail sales figures overnight on Tuesday will also draw plenty of interest and influence the ASX200 on Wednesday.

Away from the economic calendar, commodity prices will remain a key driver, however.

For a look at all of today’s economic events, check out our economic calendar.