What to expect from the week ahead
Will stock markets be able to regain the losses of the previous week in the face of sovereign debt issues?
Those European markets hosting the banks that are thought to bear the brunt of Dubai World’s financing managed to hold relatively steady on Friday, having suffered severely the previous session, so whether they can stick with these stable ways this week and on into the end of the year remains to be seen.
Monday
Much will depend on the next few weeks’ economic data reports. Kicking
off this week is UK money supply and consumer credit data. UK banks are
expected to have moderately increased mortgage approvals in October,
while consumer credit is still forecast to be in the red but to a lesser
extent in October than in the previous month.
Germany’s retail sales, also due Monday, are forecast to show an expansion last month compared to September’s 0.5% contraction month-on-month.
Over in the US, the Dallas Fed Manufacturing Activity Index is seen at zero in November—an improvement on the previous month’s 3.3% decline, but the Chicago purchasing managers’ index survey may show a slight slide month-on-month amid economic uncertainty—though a figure above 50 still represents expansion.
Tuesday
On Tuesday, the US will report its ISM manufacturing survey data, which
prices paid expected to remain in the region of 65.0, while activity
slips to around 54.8 this month versus 55.7 previously. The UK will also
report its own PMI manufacturing survey on Tuesday, seen little changed
at around 54.0. With Britain’s housing market winding down for the
holiday season, pending homes sales are likely to tail off this month
and the next, seen down 0.5% in November after a 6.1% gain the month
before.
Wednesday
Wednesday’s focal point will be the Federal Reserve’s Beige Book,
released after the Wall Street close, while on this side of the Atlantic
the Eurozone producer price index is seen improving slightly to register
a flat performance in October.
Thursday
More economic insights will come from the EC on Thursday, when investors
will have the region’s retail sales (where marginal month-on-month
growth is expected in October), PMI composite index (final reading of
53.7 forecast for November), European Central Bank interest rate
decision (unchanged at 1.0%) and, most importantly for many, the
region’s third quarter gross domestic product reading (expected to
confirm 0.4% expansion over the July-September period).
US jobs data will also be eyed on Thursday, when non-farm productivity is expected to have slipped slightly in the third quarter, while labour cost falls shows signs of deceleration.
Friday
More US labour market data is due on Friday. Following the previous
day’s quarterly job report, investors will have November data to digest
with the change in non-farm payrolls for the month predicted to show
118,000 were knocked off the payroll this month, though this is less
than the 190,000 registered in October. November’s unemployment rate is
seen unchanged on a monthly basis at 10.2%.
