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The Week Ahead – Stats, Trade and UK Politics in Focus

It’s another busy week ahead for the global financial markets. While economic data is on the heavier side, updates on trade will continue to drive risk appetite.
Bob Mason
Europe (and euro) economic crisis concept.

On the Macro

It’s a busy week ahead on the economic calendar, with 54 stats to monitor over the week.

For the Dollar:

The markets will need to wait until Tuesday for the first set of Stats from the U.S.

October goods trade figures, new home sales, and November consumer confidence figures are due out.

Of less influence on the day will be September house price figures.

With consumer spending continuing to support the U.S economy, the CB Consumer Confidence Index figures will have the greatest impact.

It’s a busier day on Wednesday, however. 3rd estimate GDP numbers for the 3rd quarter are due out, along with Chicago PMI, durable goods orders and inflation figures.

Barring deviation from 2nd estimates, we would expect the durable goods orders and Core PCE price index figures to have the greatest impact.

Barring dire numbers, the weekly jobless claims, personal spending and pending home sales figures will likely have a muted impact on the day.

With the U.S markets closed on Thursday and on a shortened session on Friday, there are no stats to provide direction.

Through Thursday and Friday economic data limited to the weekly jobless claims figures and Chicago PMI. Barring particularly disappointing figures, we would expect the markets to brush aside the numbers.

While the numbers will provide direction, geopolitical risk will also drive the Dollar and influence risk sentiment. Updates from Beijing and Washington will continue to have the greatest impact in the week.

The Dollar Spot Index ended the week rose by 0.28% at $98.273.

For the EUR:

It’s also a busy week ahead on the economic data.

German business and consumer sentiment figures due out on Monday and Tuesday get things going for the EUR.

Germany’s Ifo Business climate index figure on Monday and the GfK consumer climate figure on Tuesday will provide the EUR with direction.

In Germany, consumer confidence has softened of late as concerns over labor market conditions weigh. A further decline in confidence would certainly weigh on the EUR, as businesses continue to struggle.

With stats limited to French jobseeker numbers on Wednesday and prelim inflation figures on Thursday, the focus will then shift to key stats due out on Friday.

French consumer spending and Germany and the Eurozone’s unemployment figures will have the greatest influence.

We can expect Germany’s unemployment change figure to garner the greatest interest.

Prelim inflation figures out of France, Germany, Italy and the Eurozone will also need to be monitored in the 2nd half of the week.

The EUR/USD ended the week down by 0.27% to $1.1021.

For the Pound:

It’s another quiet week ahead on the economic calendar.

There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats leaves the Pound firmly in the hands of UK politics in the week, with debates, opinion polls, and projections the main drivers.

Sky News hosts a televised debate on Thursday, which includes Jo Swinson, Boris Johnson, and Jeremy Corbyn.

On Friday, a live debate with the leaders of the seven major political parties in the UK will be in focus after the European markets close.

The GBP/USD ended the week down by 0.49 % to $1.2834.

For the Loonie:

It’s a busy week ahead on the data front.

September wholesale sales figures due out on Monday and GDP numbers due out on Friday will have the greatest impact.

Following the BoC’s cautious view on the economic outlook, Friday’s 3d quarter GDP numbers will garner plenty of interest.

Bank of Canada Governor spoke last week on policy, stating that interest rates were at the right level to support the economy. It remains to be seen whether the GDP numbers alter that view…

From elsewhere, expect key stats from the Eurozone and the U.S to influence risk sentiment and the Loonie.

Updates from the U.S and China on trade will also need monitoring.

The Loonie ended the week up by 0.16% to C$1.3202 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week ahead. Economic data include 3rd quarter construction work down and capital expenditure figures due out on Wednesday and Thursday.

On Friday, October private sector credit numbers are also due out and will need to hold relatively steady.

On the geopolitical risk front, chatter on trade will monitoring and will remain the key driver.

The Aussie Dollar ended the week down by 0.45% to $0.6786.

For the Japanese Yen:

It’s also a relatively busy week ahead on the economic calendar.

Key stats include October retail sales figures due out on Thursday and prelim industrial production figures on Friday.

We would expect Tokyo inflation numbers, due out on Friday, to have a muted impact on the Yen.

While the retail sales and production figures will influence, geopolitics will continue to provide direction throughout the week.

The Japanese Yen ended the week up by 0.13% to ¥108.66 against the U.S Dollar.

For the Kiwi Dollar:

It’s a busy week ahead on the economic calendar.

3rd quarter retail sales figures due out on Tuesday gets things going for the Kiwi Dollar.

October trade data on Wednesday and business confidence figures on Thursday will also provide direction.

We would expect building consent figures due out on Friday, however, to have a muted impact on the Kiwi.

Outside of the numbers, the RBNZ will release its financial stability report on Wednesday which will garner plenty of interest. After the RBNZ’s hold on interest rates earlier in the month, the report will give some clues on what lies ahead…

The Kiwi Dollar ended the week up by 0.09% to $0.6410.

Out of China:

It’s a quiet week on the economic data front. There are no material stats due out of China until after the market close on Friday.

November’s private sector PMI numbers are due out on Saturday.

With no stats to consider, updates from Beijing on trade talks with the U.S will continue to influence risk appetite.

The Yuan ended the week down by 0.42% to CNY7.0391 against the Greenback.

Geo-Politics

Impeachment: Open door testimony continued to deliver damming evidence last week. In spite of the testimony, however, Trump looks to have avoided a loss of Republican support, which dashes any chances of a conviction as things stand. The Democrats, however, are expected to impeach.

Trade Wars: Trump spoke of the U.S and China getting close to a phase 1 agreement last Friday. With Thanksgiving on Thursday, updates from both sides in the early part of the week will have a material impact on the global financial markets. At the start of the week, the big question will be whether vetos the HK Bills that were voted through to support the rights of HK protestors…

UK Politics: Live televised debates, opinion polls, predictions and bookmaker odds will continue to be the driving force behind the Pound. At the start of the week, the opinion polls will provide direction, as voters react to last Friday’s Q&A session. The focus will then shift to live debates scheduled for Thursday and Friday…

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