Week Ahead starting 4/12/23: US jobs; China Caixin; Central banks; oil; UK retail sales; Berkeley

(Partial Video Transcript)

Caixin services PMI could move the markets

Hello, welcome to IGTV and this is your look ahead to the coming week starting 4 December 2023. Now, markets have had a really good run up in terms of equities in November, but is this all about to change?

Well, let's give you a quick snapshot of what we are looking out for in the coming week.

On Monday, we've got trade balance figures out of Germany and also factory orders out of the US. And then a little later along the week, we get retail sales numbers out of the UK. The Caixin services purchasing managers’ index (PMI) out of China might be one that could move the markets if we get a surprise number.

Non-farm payrolls a highlight

Now that we're coming towards the end of the year and a lot of the earnings have been done and out of the way, many investors out there will be looking for indicators such as the Caixin to decide what the pivot points and where to for markets in the next few weeks, which will be pretty quiet.

We've also got an Reserve Bank of Australia (RBA) interest-rate decision and more data out of the US, including the JOLTS job openings data. Midweek, keep your eye out for third-quarter gross domestic product (GDP) growth numbers out of Australia.

And we also have trade numbers out of the US, along with employment change data too. And the Bank of Canada follows Australia with its interest rate decision. And on Thursday, we've got more trade numbers out of Australia and China and the UK.

The spotlight will be in the property market with the latest Halifax print. And now the euro zone: look out for growth-rate numbers along with initial jobless claims data over in the US.

This brings us neatly to the key event of the week, which is those non-farm payrolls and of course, third-quarter GDP growth rate numbers out of Japan as well. Although this is the final print.

Joining us all the way from New York now from tastylive (part of IG) is Chris Vecchio.

What will Powell do?

AO: Chris, before we get to that jobs number, let's talk to you about power, because you spoke about this a great deal this week. And we've had pretty benign comments from other Fed policymakers so far. What do you expect Powell to do, tell the line or actually say something quite surprising?

CV: Well, the line that's being told from policymakers so far is actually one that's a little bit of a juxtaposition, and I say that because you've heard from people like Federal Reserve (Fed) Governor Christopher Waller, who suggested that rate cuts could be around the corner.

And yet there has also been commentary from individuals like Richmond Fed President Barkin or Fed Governor Michelle Bowman, suggesting that we may need to see rates stay high for longer.

And that's the perspective that I think Powell could ultimately adhere to trying to prevent markets from getting too far ahead of themselves.

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