In-depth Analysis

Focus on PMI, CPI, and NFP figures

On Monday 28th: ECB Governor, Christine Lagarde is scheduled to speak, and monthly Australian retail sales are due.

On Tuesday 29th: Germany and Spain release their CPI data, GDP for Canada is due, and the US CB Consumer Confidence report is published.

On Wednesday 30th: The Chinese Manufacturing PMI is released, Employment figures for Germany are due, EU CPI, and a number of releases are due from the US, along with a speech from Fed Chair Powell.

On Thursday 1st: The Caixin Manufacturing Purchasing Managers’ Index (PMI) is published, Manufacturing PMIs for Europe and the US are due, US PCE is released.

On Friday 2nd: Australian Retail Sales data is due, Non-farm Payrolls from the US, and Canadian Employment data is released.

Weekly outlook

It’s another big week for economic data releases, many of which are key pieces of information that will be used for the purpose of making decisions in regard to upcoming monetary policy for a number of Central Banks.

If forecasts are correct, with many global manufacturing PMI figures leaning towards contraction, unemployment rates starting to climb, retail sales figures slowing and CPIs hopefully starting to peak or drop, there will have to be some consideration given to a slowing of key interest rate increases for most countries soon.

In a fresh hit to manufacturing and global supply chains, COVID-19 cases approach records again in China. As a result, the ruling Communist government is once again extending its harsh lockdowns, including in a city of over six million people where manufacturing workers battled with police.

Monday 28th of November

Australian monthly retail sales for October are expected to slow down from 0.6% to 0.4%.

ECB Governor, Christine Lagarde is scheduled to appear before the European Parliament’s Committee on Economic and Monetary Affairs in Brussels. Investors will listen to her speeches for indications about future interest rate changes in the EU.

Tuesday 29th of November

Germany and Spain are expected to release their CPI data today with what is hoped to be the beginnings of a trend back downwards for inflation in the countries. Forecasts are for a drop from 10.4% to 10.3% year-on-year for November in Germany.

GDP figures for Canada are being released today. Year-on-year GDP measures the yearly inflation-adjusted worth of all Canadian goods and services. It’s the most complete gauge of economic health. The annualized figure for the third quarter is expected to increase from 3.3% to 4.4%.

The US CB Consumer Confidence report for November is due. The level of consumer confidence in the economy is tracked by the Conference Board’s Consumer Confidence index. If people are feeling hopeful about the future, they are more likely to go out and spend money. Expectations are for a drop from 102.5 to 100.3.

Major Earnings Reports due:

  • Intuit Corp
  • The Bank of Nova Scotia
  • Hewlett Packard Enterprise Co

Wednesday 30th of November

The Chinese Manufacturing PMI is expected to show some improvement in the sector despite lockdowns and recent news of Apple’s biggest iPhone factory being affected, which is located in Zhengzhou. Expectations see an increase from 49.2 to 50.0.

Germany will report on its employment situation with the Unemployment Change, which quantifies the rate of change in the number of jobless persons over the course of the previous month.

The EU’s CPI figures are also due, with what is expected to be the start of a declining trend in inflation among the 19 member nations collectively. For November in the EU, predictions are for a decline from 10.6% to 10.4% year over year.

At the Brookings Institution in Washington, District of Columbia, Federal Reserve Chair Jerome Powell is scheduled to give a talk regarding the economy and the job market.

A number of releases are due from the US today, firstly with the ADP National Employment Report which measures the monthly change in non-farm, private employment using payroll data from 400,000 U.S. businesses. The two-day-earlier publication predicts the government’s Labour Market Report and is expected to show a drop from 239K to 203K.

Second, US GDP for the third quarter is forecast for an increase from 2.6% to 2.8%.

Third, JOLTS Job Openings, which is a poll measuring job openings by the Bureau of Labour Statistics. It gathers employer data on job opportunities, recruiting, hiring, and separations and is expected to show a drop from 10.171M to 10.000M.

Fourth, Pending Home Sales are forecast to be up slightly for October on the previous month from -10.2% to -5.0%.

Fifth, EIA Crude Oil Inventories is due, which monitors the weekly change in US businesses’ commercial crude oil stocks. Inventory levels affect the price of oil, which also affect inflation.

Major Earnings Reports due:

  • Salesforce Inc
  • Royal Bank of Canada

Thursday 1st of December

The Caixin Manufacturing Purchasing Managers’ Index (PMI) published today incorporates survey findings from manufacturing firms across China. A number over 50 indicates industrial expansion, while a value below 50 indicates a decline. A drop is expected from 49.2 to 49.0 for November.

A number of Manufacturing PMIs are also due across the globe, including Spain, Italy, France, Germany, the EU, the UK, and the US. Each individual PMI is currently showing a contraction in manufacturing, with many forecasts to show deepening declines.

In the US, the Core Personal Consumption Expenditure (PCE) Price Index, which tracks price changes for consumer goods and services, excluding food and energy, is due. PCE is chain-weighted, thus it responds to customer behavior. It is forecast to drop from 0.5% to 0.3% for the month of October.

Major Earnings Reports due:

  • Toronto-Dominion Bank
  • Bank of Montreal

Friday 2nd of December

Retail Sales data in Australia is due to be published today, which measures the monthly change in national retail sales. It’s expected that sales should rise slightly in view of the Christmas season approaching but will be offset by higher interest rates and inflation.

From the US, traders will be expected the Nonfarm Payroll report which measures the number of individuals employed in the previous month, excluding farm workers. As part of the Federal Reserve’s mandate, full employment is regularly monitored when it considers upcoming monetary policy. The expectation is for a drop from 261K to 200K. The Unemployment Rate for the US is also forecast for an increase from 3.7% to 3.8%.

Canada’s Unemployment Rate and Employment Change are also due. Forecasts see a slight increase in Unemployment from 5.2% to 5.3%.

 

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