Key events to watch in the week ahead: 25 November – 1 December 2024

This week’s overview

Wall Street managed to regain some footing from last week’s dip, as the climb in US 10-year Treasury yields came to a pause after briefly touching its key 4.5% level, allowing rate-sensitive tech stocks to enjoy some breather. NVIDIA’s results were clearly the major risk event this week, with market participants reassessing whether the initial jitters over NVIDIA’s sales forecast has been an overreaction, given that the demand outlook for artificial intelligence (AI)-related products and solutions remain robust.

Heading into the new week, here are four key events to watch.

27 November 2024 (Wednesday, 8.30am SGT): Australia’s consumer price index (CPI)

Key Australian inflation measures released in late October were at the margin softer than expected. Headline inflation rose by 0.2% in Q3 (consensus was +0.3%), lowering the annual rate to 2.8% YoY from 3.8% prior, below forecasts of 2.9%. The monthly CPI Indicator for September rose by 2.1% easing lower from a 2.7% rise to August. The core reading eased to 3.2% YoY in September from 3.4% in August.

The November Reserve Bank of Australia (RBA) board meeting minutes released this week reiterated that the RBA’s current policy settings are appropriate as the RBA seeks to bring inflation back to target “within a reasonable time frame while preserving as many of the gains in the labour market as possible.”

The preliminary expectation is for the monthly Indicator in October to ease rise to 2.5% YoY However, this will change as analysts fine-tune expectations in the coming days. The Australian interest rate market is not anticipating a first 25 basis point (bp) RBA rate cut until July 2025.

27 November 2024 (Wednesday, 11pm SGT): US core Personal Consumption Expenditures (PCE) price index

The September read for headline PCE came in line with the 2.1% forecast, following a 2.3% advance in August. However, the core PCE came in higher than expected, rising 2.7% versus the 2.6% consensus. The recent uptick in core PCE marked its first since August 2023, and another uptick in October data may drive concerns around sticky inflation and call for a less dovish Federal Reserve (Fed) rate outlook ahead.

Currently, the rates markets are leaning towards a 25 bp rate cut from the Fed in December, with a 60% probability being priced. Expectations are for US October core PCE to increase 0.3% month-on-month, while headline PCE may rise 0.2% from the prior month. Another persistent inflation read may see dovish rate bets being pared for December and call for more patience in further easing.

28 November 2024 (Thursday, 3am SGT): Federal Open Market Committee (FOMC) meeting minutes

At the November meeting, the Fed cut its Fed funds rate by 25 bp to a range of 4.50% - 4.75%, which marks a continuation of its monetary easing process. While the move was widely anticipated by markets, Fed Chair Jerome Powell maintained some data-dependency, saying that the central bank is not ‘on any preset course’.

The upcoming meeting minutes are expected to show policymakers leaning into a soft landing narrative, given the series of upside economic surprises since August this year. Focus will be on the reasoning behind the 25 bp rate cut amid economic resilience, and the rate outlook moving forward. Progress in the inflation fight has stalled over the past months as well, so clarification around the Fed's approach in balancing growth and tackling persistent inflation will also be sought.

29 November 2024 (Friday, 6pm SGT): Eurozone’s core CPI flash estimate

Last month (October), the annual inflation rate in the Euro Area (EA) rose to 2% YoY, up from 1.7% in September, the lowest level since April 2021. Meanwhile, the core inflation rate remained at 2.7% in October for a second month.

The October inflation update followed the European Central Bank (ECB)’s October 17th interest rate meeting, during which the ECB cut rates by 25 bp to 3.25% and reiterated that further policy decisions will be data dependent. The ECB also indicated that “the disinflationary process is well on track” and that “the inflation outlook is also affected by recent downside surprises in indicators of economic activity.”

This month (November), the preliminary expectation is for headline inflation to rise to 2.3%. YoY. The Core reading is expected to rise to 3.0% YoY. Nonetheless, the rates market is fully priced for another 25 bp cut from the ECB at its December 12th meeting, with a 20% probability of a heftier 50 bp cut.