Many events have been happening in the past week, and these events are set to impact the financial market greatly in the final days of November 2023. The Federal Reserve and European Central Bank plans to control inflation and interest rates are among them.
Other financial institutions have also made strides in implementing their financial services that are expected to affect the entire market. These include the Bank of Japan, the Bank of England, and the RBNZ. Additionally, indicators from China and Australia will add to implications that indicate a strong influence on market trends.
Market expectations next week – Plan ahead
The Europe Central Bank and the United States Federal Reserve have made their intentions known on plans to cut rates and control rising inflation that will also impact bets in financial service provision.
The US dollar expects a shift in market movement following the consumer confidence numbers and the US housing sector, which is considered a litmus test for the United States economy. Additionally, more interest will be drawn from consumer confidence numbers.
Consumer confidence will impact the currency because a slide in the number indicates weak consumer spending. The US private consumption adds 60% to the US economy, and this outlook for weak consumption could significantly impact the economy and pave the way for the Fed to dismiss the need for a hawkish rate path.
Regardless, the inflation and personal income combined with the spending numbers have a higher chance of impacting the US Dollar. A drop in personal income, spending figures, and leaner inflation could secure confidence in bets on the Fed rate cut in May.
During last Friday’s US Thanksgiving holiday, ISM Manufacturing PMIs closed the day, reflecting on a busy week. The manufacturing sector adds less than 30% to the economy. Powell, The Fed chair, is set to speak on Friday, and this will add to speeches by FOMC members Williams, Waller, and Bowman that could also impact the dominant currency.
What to expect for the EUR and the Pound
The Euro is also set to witness an impact based on the German consumer confidence numbers that will draw much investor interest, set to be released on Tuesday. The development of the macroeconomic environment will be influenced by consumer confidence figures picking up.
Moreover, more impacts on the bet policies by the ECB might be significantly influenced by the inflation figures for France, to be released on Thursday, while Spain’s and Germany’s are to be released on Wednesday. Rate cut talks could also be influenced by softer inflation.
The Eurozone, added to the other stats, including German retail sales and the consumer spending numbers from France, will be considered as they show influential power to the EUR trend. These figures will take up the second fiddle role to the inflation numbers.
The PMI figures for the Eurozone and Italy will also generate more investor interest. Christine Lagarde, the ECB President, also intends to speak on Monday, Tuesday, Thursday, and Friday.
The Pound has its influential waves from the Bank of England that are expected in the first half of the week ahead. Speeches are set, and among them is Andrew Bailey, the Bank of England Governor, who is scheduled to speak on Tuesday and Wednesday.
Considerations of the interest rate cut timing will also add to the implications for the Pound. Additionally, Johnathan Haskel, a member of the Monetary Policy Committee, will also deliver a speech on Wednesday.
House price numbers to be released on Thursday will also impact the currency, and a fall in house prices influences the spending plans and consumer confidence. Moreover, a weaker consumption figure could significantly affect the United Kingdom’s (UK) economy, increasing the BoE rate cut bets.
How it looks for the Asian market
Retail sale figures in Japan on Thursday could impact the Japanese Yen, and an increase in consumer spending would signal strong support for the Bank of Japan’s bets on exits from negative rates.
An uptrend in these consumption numbers could ignite demand-driven inflation pressure. Moreover, a decline in production would indicate a weaker macroeconomic backdrop and influence the BoJ in relieving pressure. The capital spending and unemployment numbers would also move the value of the Yen.
For the region of China, Thursday’s NBD private sector PMI figures are set to increase investor interest. A weaker figure could affect the consumer market appetite related to riskier assets. The Caixin Manufacturing PMI is an all-important consideration that will increase investor interest. A drop in the PMI could lead investors to shift attention to Beijing.
