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What mattered last week and a preview of the week ahead

 

What mattered last week:

  • After six straight weeks of gains, U.S. stocks closed marginally lower last week as optimism surrounding the U.S. – China trade deal waned.
  • Fuelled by confusion around tariff rollbacks and the amount of agricultural purchases China will make from the U.S.
  • Data wise a weak composite Eurozone PMI on Friday overshadowed a much needed pick up in the manufacturing sector PMI.
  • This contrasted with a strong PMI print in the U.S. that suggests the worst of the manufacturing slowdown in the U.S. has passed and boosted the U.S. dollar against the EUR.
  • China eased monetary policy with a small reduction in its Loan Prime Rate (LPR).
  • In Australia, the local stock market finished the week -1.23% lower, near 6700 as trade uncertainties and Westpac’s 23 million money laundering breaches resulted in a 7% fall for the stock.
  • The AUDUSD closed the week below .6800c for the first time in 7 weeks as expectations of the RBA cutting rates again in December increased and a stronger U.S. dollar weighed.
  • A tough week in the cryptocurrency space as Bitcoin fell almost 15%. The Peoples Bank of China (PBOC) cracked down on cryptocurrencies and warned investors not to confuse cryptocurrency with blockchain technology.

For the week ahead, the key events are:

Australia: RBA Governor Lowe speech (Tuesday), Q3 construction work (Wednesday), private capital expenditure (Thursday), private sector credit (Friday).

  • RBA Governor Lowe speech (Tue): The title of the speech is "Unconventional Monetary Policy: Some Lessons from Overseas" - there is debate as to whether the speech will be largely academic or used to flag that the RBA is considering QE in the near future to boost the Australian economy.

New Zealand: Retail sales (Tuesday), RBNZ financial stability report, balance of trade (Wednesday), ANZ business confidence (Thursday), ANZ Roy Morgan consumer confidence, building permits (Friday).

China: Industrial profits (Wednesday), NBS manufacturing and non-manufacturing PMI’s (Saturday).

Japan: Retail sales (Thursday), unemployment, industrial production, consumer confidence (Friday).

U.S.: House price index, new home sales, CB consumer confidence (Tuesday), personal spending, personal income, durable goods orders, core PCE price index, pending home sales (Wednesday).

  • Durable Goods Orders (Wed): Durable goods orders are expected to decline -0.8% in October following a -1.2% decline in September. Excluding transportation, a modest gain of +0.2% is expected after a -0.3% fall in October.

Fed speakers on the wires this coming week include Fed Chair Powell and Brainard.

Canada: Wholesale sales (Tuesday), average weekly earnings (Thursday), GDP Q3 (Friday).

Euro Area: German IFO (Monday), GFK consumer confidence (Tuesday), EA business confidence (Thursday), German and EA inflation and unemployment (Friday).

UK:GFK consumer confidence, nationwide housing prices, mortgage approvals (Friday).

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