WEEKLY MARKET SNAPSHOT 27/11-01/12|The GDPs of: Canada, the USA, France, Italy and Switzerland will come into sharp focus over the coming week
With the FOMC due to meet in December, to decide on the next interest rate move for the USA economy, many FX traders and analysts will focus on the latest USA GDP figure when published on Wednesday. The Fed chairs may feel emboldened to begin a hawkish monetary policy in 2018, should GDP (annualised) come in at (or close to) the forecast 3.4% growth, an uplift from the previous reading of 3%. North American growth appears to be built on solid foundations, as Canada’s economy has also been delivering stunning GDP figures over recent months. At 4.5% growth it’s currently delivering the leading GDP figure from any developed economy, its unemployment rate is stable and inflation is under control, whilst most hard data readings are reaching targets.
Several European countries also publish their latest GDP figures over the coming week. France and Italy have made impressive turnarounds over the last year or so, France’s GDP is currently at 2.2% YoY, whilst Italy’s is at 1.8%, a considerable rebound from where both countries were placed back in, for example, 2014. However, with high unemployment across the Eurozone region, and that unemployment rate concentrated specifically in the youth sector of both countries, Italian and French lawmakers should avoid developing complacency.
Monday starts the week with German retail sales data, currently growth is at 4.1% YoY, the anticipation is for this figure to be maintained. As is tradition on Monday, the latest Swiss Bank deposit levels will be published, metrics that can effect the price of the Swiss franc as a safe haven asset. From the USA new home sales data will be published, a predominately seasonal fall of -7.8% MoM for October is forecast.
Tuesday begins with another house price survey from the U.K., the Nationwide house price index is currently at 2.5% growth YoY, this figure is expected to be maintained, or increased. The OECD outlook for the Eurozone will be released, a publication which is monitored carefully, Germany’s GfK consumer confidence reading will also be published. As attention turns to the USA markets’ opening, the latest advanced goods trades balance will be revealed, as with the majority of such USA figures, a deficit is likely to be published, the forecast is for a deterioration to -$65.5b for October. The various monthly Case-Shiller house price data metrics will be delivered, the composite reading for the 20 leading cities is the most carefully monitored, expected to remain around a figure of circa 5.92% house price growth YoY.
The conference board consumer confidence reading will be published, forecast to fall moderately to 124 from 125.9, this highly respected value is always noted for any variance. The nominee chosen by Trump to replace Yellen as Fed chair, Mr. Powell, will appear before a senate hearing committee. Canada’s central bank Governor Poloz and his deputy, will hold a press conference. The day’s medium to high impact economic events closes with Japan’s latest retail trade figures; expected to remain close to the current 2.2% YoY growth.
On Wednesday the latest French GDP figure will be revealed, currently at 2.2% YoY this reading is forecast to be maintained, or improved on. Several U.K. metrics will be published, including consumer credit and mortgage approvals. For the Eurozone we receive the latest November data on the various sentiment readings, specifically the headline consumer confidence reading will be closely watched. Germany’s CPI will be revealed, currently at 1.6% YoY, analysts will assess this figure in relation to the ECB and its monetary policy objectives; to push inflation consistently towards the 2% objective. As U.S. markets open, the latest GDP figures will be revealed, annualised the projection is for a growth from 3.0% to 3.4%. Later in the afternoon Janet Yellen will make her final appearance before the joint economic panel in the Congress. Pending home sales in the USA are predicted to rise by 1.0% MoM. Late evening the day’s economic data closes with the publication of various Japanese data.
Thursday begins with a significant supply of Australian data, the most prominent of which is the private sector credit and capital expenditure, whilst activity and business confidence data between the crucial business partners of New Zealand and Australia will also be delivered. The latest Chinese PMI data for manufacturing will be revealed, as arguably the engine of world manufacturing growth, this figure is always examined carefully. As European markets begin to prepare for opening Swiss GDP figures for the latest quarter and annually will be revealed, currently both figures are at 0.3% and the prediction is for little variance on this figure. German unemployment is forecast to remain at 5.6%, whilst the Eurozone unemployment rate is predicted to remain at 8.9%. Eurozone CPI is predicted to remain at 1.4% YoY. A raft of USA data is published in close timing; personal spending and consumption, and the core PCE YoY figure will be revealed, the latter is forecast to remain at 1.3% growth. Late evening a significant series of data is published by various Japanese agencies, the most prominent of which is the CPI, which is still lagging as one of the lowest in the leading G10 nation’s, at 0.7% YoY growth.
On Friday we receive a small cluster of Markit PMI manufacturing readings for several of Europe’s leading economies and the Eurozone as an entity. Italian GDP is forecast to retain its recent impressive 1.8% growth. Canada’s economy comes into sharp focus on Friday as the latest GDP figures are published, annualised the current figure is at a highly impressive 4.5% year to date, this reading is forecast to be maintained. Unemployment in Canada is predicted to stay at 6.3%, whilst the latest manufacturing PMI is predicted to retain its current 54.3 level. ISM readings are highly respected in the USA amongst the analyst community, several are published late afternoon in the USA, including the critical ISM manufacturing reading, currently at 58.7, a slight contraction in the November reading to 58.3 is forecast.
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