Investors have a relatively light economic calendar to follow this week due to the Thanksgiving holiday in the US. Nonetheless, there will be some data releases and Fed members’ speeches that may keep traders on their toes. Mainly, Wednesday will be the most important day of the week in terms of data and risk events.
Black Friday (the day after Thanksgiving in the US) is an important event to find out how high inflation levels have affected Americans’ shopping habits, and whether high-interest rates on their credit cards could hinder them from taking on additional debt. This could also help economists in predicting how may the Christmas shopping season look like.
Markets sentiment U-turned and paused the US Dollar’s bearish trend
last week, while the gold lost around 1.2% of its value and most of the US major indices closed in the red on Friday mainly, due to Fed members’ hawkish comments combined with better-than-expected US retail sales data. On the other hand, the Brent oil price fell below the $90 threshold and tested a multi-week low on concerns of lower demand over rising COVID-19 cases in China, a weak global economic outlook, and a potential recession caused by a tight monetary policy from central banks aimed to tame high inflation levels.
Economic data highlights
Monday 21st of November
Tuesday 22nd of November
- EUR - Producers Price Index (Germany-OCT)
- BoE Cunliffe Speech
- USD- Chicago Fed National Activity Index (OCT)
Wednesday 23rd of November
- RBA Gov Lowe Speech
- CAD - Retail Sales (SEP)
- Fed Mester Speech
- Fed George Speech
- Fed Bullard Speech
- BoC Gov Rogers Speech
- ZAR- Leading Business Cycle Indicator (SEP)
- ZAR- SACCI Business Confidence (OCT)
Thursday 24th of November
- AUD- Global Manufacturing & Services PMI Flash (NOV)
- RBNZ Interest Rate Decision & RBNZ Press Conference
- EUR- Global Manufacturing & Services PMI Flash (NOV)
- GBP- Global Manufacturing & Services PMI Flash (NOV)
- USD- Durable Goods Orders (OCT)
- USD- Global Manufacturing & Services PMI Flash (NOV)
- USD- Michigan Consumer Sentiment Final (NOV)
- US Crude Oil Inventories
- FOMC Minutes
- ZAR- Inflation Rate (OCT)
Friday 25th of November
- US Thanksgiving Holiday
- JPY- Leading Economic Index Final (SEP)
- EUR- Ifo Business Climate (Germany-NOV)
- CAD- Average Weekly Earnings YoY (SEP)
- ZAR- PPI (OCT)
- ZAR- Business Confidence (Q4)
- ZAR- Interest Rate Decision
- NZD - Retail Sales (Q3)
- JPY - Inflation Rates (Nov)
- EUR - GDP (Germany-Q3)
- EUR- GfK Consumer Confidence (Germany -DEC)
The RBNZ is widely expected to hike interest rates by 75bp this week taking the cash rate from 3.5% to 4.25% as the inflation rate remains far above the 1% - 3% targeted average (at 7.2% in Q3) combined with a very low unemployment rate (at 3.3% Q3).
Inflation levels pointed lower in October and boosted investors’ risk appetite. However, Fed members suggested last week that there were more rate hikes on the horizon but at a slower pace. According to Fed member Mr Bostic, “the central bank should conclude its tightening cycle after no more than 100 bp of additional hikes “.
The expected FOMC minutes does not consider the October inflation numbers (as the meeting was held before the CPI data release). Nevertheless, investors would check the minutes to find out how far the Fed could go in its war on inflation even with the high prospect of causing an economic recession.
South African Interest Rate Decision
The South African Reserve Bank (SARB) will announce its final interest rate decision for the year this week, a day after the release of October consumer inflation numbers. The headline inflation number is expected to ease to 7.4% from 7.5%, while core inflation is expected to remain sticky, rising from 4.7% to 4.9%.
In the past 12 months, the repo rate has been increased by 250 basis points to 6.25% by September 2022 and has been in line with international central banks’ actions to contain rising inflation, which is currently far outside the central bank’s targeted range of 3%-6%.
The SARB is expected to hike interest rates by 75 basis points, taking the repo rate to 7% and the prime rate to 10.5%.
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