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Key Events In The Week Ahead

Courtesy of ZeroHedge View original post here.

Looking at the event calendar for this week, Deutsche Bank’s Jim Reid notes that “we might find ourselves stuck a little this week as well as it isn’t the biggest for important data but there are still some key highlights for markets and the global economy to look forward to.”

The main data release will come in the form of the preliminary November PMIs on Friday, and if global data is indeed turning upward as many now suspect, this will be a useful point for it to show itself. Ahead of that, both the Federal Reserve (Weds) and the ECB (Thurs) will be releasing accounts of their October monetary policy meetings. In politics, we’ll see the first televised debate for the UK general election (Tues) alongside further impeachment hearings in the US and a Democratic primary debate (Weds). Finally, we’ll hear from ECB President Lagarde on Friday, and earnings season will continue to draw to a close.

As Reid goes on to explain, the preliminary November PMIs on Friday will be important as expectations have risen that the global economy has bottomed. Indeed, DB’s own economists put out a global piece on Friday suggesting such an outcome (albeit with event risks still there) in the US, Europe and in Asia. Back to PMIs, and consensus for the German composite currently stands at 49.2, above October’s 48.9 but still in contractionary territory. Meanwhile, the Euro Area composite PMI is seen rising to 50.8, having been 50.6 in October. A similar increase is expected in the US.

Elsewhere in the US, there aren’t a great deal of data releases out this week. We’ll get the final University of Michigan sentiment indicator for November on Friday, following the preliminary reading which saw a small increase to 95.7, a three-month high. On Wednesday, October’s building permits and housing starts data comes out, before Thursday sees the release of October’s existing homes sales, along with the Philadelphia Fed’s business outlook indicator for November.

The FOMC minutes on Wednesday will be interesting but with the Fed seemingly on hold until further notice it’ll be difficult to gain too much new insight into it. However our economists think that given the growing contingent of policymakers that have either voiced opposition to the latest rate cut or only supported it conditional on sending a hawkish signal with it, then the minutes could provide more intelligence as to the power of the different camps in the Fed at the moment.

Before we look at the rest of the weekly economic highlights, this morning in Asia the PBOC has cut the interest rate on its seven-day reverse repurchase agreements to 2.5% from 2.55% for the first time since October 2015. Along with the reduction in interest rates, the PBoC also added CNY 180bn of cash into the financial system via open market operations, helping to alleviate liquidity concerns. Meanwhile, over the weekend the PBOC’s quarterly report warned not only on growth risks but also on rising inflation, highlighting the limited room that monetary policy has to respond. The PBoC also said in the report that it will “increase counter-cyclical adjustment” to ward off downward pressure on the economy while adding that monetary policy will “properly handle the short-term pressure,” making sure not to offer excessive funding, while keeping an eye on the risk of expectations that inflation may spread.

We also saw new trade headlines over the weekend with the Chinese Commerce Ministry saying in a statement that the US and Chinese trade negotiators held “constructive discussions” in a phone call on Saturday to address each side’s core concerns ahead of “phase one“ of the trade deal. The talk was held between China’s Vice Premier Liu He and the US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer. The report further added that the call was held at the request of the U.S. negotiators, and the two sides agreed to remain in close communication.

Asian markets are trading mixed this morning with the Nikkei (+0.22%), Hang Seng (+0.83%) and Shanghai Comp (+0.43%) all up while the Kospi (-0.29%) is trading down. Elsewhere, futures on the S&P 500 are trading flat.

Back to this week’s highlights and we have a number of central bank speakers over the week ahead, with ECB President Lagarde scheduled to speak on Friday. Her first speech at the start of the month didn’t feature monetary policy at all, so if her remarks do cover monetary policy issues, markets will be paying close attention in order to find out more about her views. Alongside Lagarde, we’ll hear from ECB Vice President de Guindos, along with Bundesbank President Weidmann. And from the US, this week’s Fed speakers include Cleveland Fed President Mester, New York Fed President Williams, and Minneapolis Fed President Kashkari.

Turning to politics, this week has two notable debates occurring on either side of the Atlantic. The first will be the televised head-to-head debate tomorrow between Prime Minister Johnson and Labour Party leader Corbyn, which comes ahead of the UK general election on 12 December. The polls this weekend showed the Conservatives anywhere from 8 to 16 percentage points in the lead with some evidence of Brexit Party votes slightly going their way this week relative to the week before. Elsewhere, Bloomberg reported that in a speech today at the CBI, PM Johnson will offer tax cuts to the business leaders for the disruption caused by Brexit. He will say a Conservative government victory at the December 12 election will lead to a “fundamental review” of business rates. On taxes, the U.K. and US elections over the next 12 months possibly bring the sharpest divide between cutting and raising taxes in living memory. A fascinating fork in the road moment for both countries. Staying with the U.K., over the weekend PM Johnson said that every Conservative candidate has signed a pledge to vote for his deal if elected, thereby giving credibility to his claim that he can break the Brexit deadlock. Sterling is up +0.20% this morning on the news.

Staying with politics, there’ll be another debate in the US between the Democratic primary candidates on Wednesday. Although the presidential election itself isn’t until November 2020, the first primaries and caucuses occur in February. Finally, we’ll see further impeachment hearings in the US over the week ahead.

On earnings, we’re nearing the end of this season, with 461 of the S&P 500 companies having reported. Of those that have, nearly 80% have reported a positive surprise on earnings, while just under 60% have reported a positive surprise on sales. Even if your view is that expectations were managed beforehand or that share buybacks continue to distort the picture, it’s hard not to be impressed with the resilience of US markets. Highlights to watch out for this week include Home Depot on Tuesday, Lowe’s and Target on Wednesday, and Thyssenkrupp and Macy’s on Thursday.

Courtesy of DB, here is the day-by-day calendar of events:


  • Data: US November NAHB housing market index
  • Central Banks: ECB’s de Guindos, Hernandez de Cos, Lane, and Fed’s Mester speak


  • Data: Italy September industrial sales, industrial orders; Euro Area September construction output; UK November CBI industrial trends survey; US October building permits, housing starts; Canada September manufacturing sales; Japan October trade balance
  • Central Banks: RBA November meeting minutes released; Fed’s Williams speaks.
  • Earnings: Home Depot
  • Politics: UK election TV debate.


  • Data: Germany October PPI; US weekly MBA mortgage applications; Canada October CPI;
  • Central Banks: FOMC’s October minutes released
  • Earnings: Lowe’s, Target
  • Politics: US Democratic Primary presidential debate


  • Data: Japan September all industry activity index, final October machine tool orders; France November business confidence, manufacturing confidence; UK October public sector net borrowing; US November Philadelphia Fed business outlook, weekly initial jobless claims, October leading index, existing home sales; Euro Area advance November consumer confidence; Japan October nationwide CPI
  • Central Banks: ECB October monetary policy account released; policy decisions from South Africa and Indonesia; ECB’s Mersch, de Guindos, Fed’s Mester, Kashkari, Bank of Canada’s Poloz speak.
  • Earnings: Thyssenkrupp, Macy’s
  • Other: OECD publishes economic outlook


  • Data: Preliminary November manufacturing, services and composite PMIs in Japan, France, Germany, Euro Area, US; Germany final Q3 GDP; Canada September retail sales; US final November University of Michigan sentiment, November Kansas City Fed manufacturing activity
  • Central Banks: ECB’s Lagarde, Weidmann speak.

* * *

Finally, here is Goldman’s take on key US data which is the Philadelphia Fed manufacturing report on Thursday. The minutes of the October FOMC meeting will be released on Wednesday. There are a few scheduled speaking engagements from Fed officials this week, including from NY Fed President Williams on Tuesday.

Monday, November 18

  • 10:00 AM NAHB housing market index, November (consensus 71, last 71)
  • 12:00 PM Cleveland Fed President Mester (FOMC non-voter) speaks; Cleveland Fed President Loretta Mester will speak at an event at the University of Maryland. Audience Q&A is expected.

Tuesday, November 19

  • 08:30 AM Housing starts, October (GS +6.5%, consensus +5.1%, last -9.4%); Building permits, October (consensus -0.3%, last -2.7%); We estimate housing starts rose 6.5% in October. Our forecast incorporates lower mortgage rates and mean-reversion following last month’s 9.4% drop.
  • 09:00 AM New York Fed President Williams (FOMC voter) speaks; New York Fed President John Williams will give a speech at a SIFMA event in Washington. The event will be live streamed. Prepared text is expected. Audience and media Q&A is expected.

Wednesday, November 20

  • 2:00 PM Minutes from the October 29-30 FOMC meeting: At its October meeting, the FOMC lowered the funds rate target range to 1.5-1.75%, as widely expected. The Committee used more neutral language in the statement to replace the “act as appropriate” pledge, indicating in our view that the rate cut was the final step of a 75bp mid-cycle adjustment. In the minutes, we will look for further discussion of the path of the policy rate and the growth and inflation outlook.

Thursday, November 21

  • 08:30 AM Philadelphia Fed manufacturing index, November (GS +7.5, consensus +6.0, last +5.6); We estimate that the Philadelphia Fed manufacturing index rebounded by 1.9pt to +7.5 in November after falling by 16.2pt cumulatively over the last three months.
  • 08:30 AM Initial jobless claims, week ended November 16 (GS 215k, consensus 215k, last 225k); Continuing jobless claims, week ended November 9 (consensus 1,684k, last 1,683k); We estimate jobless claims decreased by 10k to 215k in the week ended November 16, following a 14k increase in the prior week.
  • 08:30 AM Cleveland Fed President Mester (FOMC non-voter) speaks; Cleveland Fed President Loretta Mester will speak at a conference on financial stability at the Cleveland Fed. Audience and media Q&A is expected.
  • 10:00 AM Existing home sales, October (GS +1.0%, consensus +2.0%, last -2.2%); After declining by 2.2% in September, we estimate that existing home sales rebounded by 1.0% in October. Existing home sales are an input into the brokers’ commissions component of residential investment in the GDP report.
  • 10:10 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks; Minneapolis Fed President Neel Kashkari will participate in a moderated Q&A in Bloomington, MN.

Friday, November 22

  • 09:45 AM Markit Flash US manufacturing PMI, November preliminary (consensus 51.5, last 51.3)
  • 09:45 AM Markit Flash US services PMI, November preliminary (consensus 51.2, last 50.6)
  • 10:00 AM University of Michigan consumer sentiment, November final (GS 96.0, consensus 95.8, last 95.7); We expect University of Michigan consumer sentiment to edge 0.3pt higher from the preliminary estimate for November, in which the index rose 0.2pt. The report’s measure of 5- to 10-year inflation expectations increased by one tenth to 2.4% in the preliminary report.

Source: Deutsche Bank, BofA, Goldman,

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