News & Analysis

Week Ahead – Thanksgiving Week

November 25, 2019

By Deepta Bolaky
 @DeeptaGOMarkets

Week Ahead

Thanksgiving Week 

It was a busy last week with plenty of trade headlines, the Hong Kong Act vote, the first election debate in the UK, and Saudi Aramco’s IPO. Investors were also keeping an eye on the impeachment hearings.

Investors will end the month with a flurry of economic data releases in the US at the start of the week ahead of Thanksgiving holiday on Thursday. The attention will continue to remain on trade, the Hong Kong council elections, and Brexit.

Geopolitics 

Trade Headlines

Investors were forced to have a reality check on trade negotiations after a series of conflicting headlines have swayed the markets. Investors are looking for signs that Phase One of the trade deal will be signed before the year ends. We, therefore, expect much attention to remain on the US-China trade tensions and on every headline that will reflect the expectations for a deal this year.

UK Election Campaign 

The Pound had remained in the elevated levels recently boosted by the prospects of a majority win by the Conservative Party. However, the local currency had been slightly under pressure after the first election debate which saw the leader of the Labour Party, Jeremy Corbyn performing better than expected.

The dismal manufacturing and services activity have added additional pressure on the Sterling pairs. Over the weekend, the release of the manifesto of the ruling Conservative Party was mostly considered aa a Pound-positive. The GBPUSD pair gapped higher on Monday’s open but doubts over the Tory manifesto has limited gains.

Hong Kong Elections 

After months of protests, Hong Kong faced a democratic test with the district council election which is held every four years. A record voter turnout at the council election on Sunday with more than 71% and a significant early lead by pro-democracy candidates have sent a strong message to the chief executive, Carrie Lam.

The performance of the council election will be a wake-up call for the government showing that many citizens reject the hard-line policy of Beijing and blamed the unrest and police brutality on the government rather than putting the blame on the protesters.

Investors will keep monitoring the outcome as a strong pro-democracy win will reinforce the fight with mainland China until the demands are met. 

Economic Data Releases

United States 

It will be a shorter week with a public holiday in the US on Thursday but it will be packed with at the start of the week with second-tier economic data. Traders will get further insights for the housing market, consumer confidence and spending capacity.

The series of data will help to align and justify the Fed’s view of the US economy. 

Monday: Chicago Fed National Activity Index

Tuesday: Fed’s Speeches, Housing Price Index, S&P/Case Shiller Home Prices Indices,

New Home Sales, and Consumer Confidence

Wednesday: Durable Goods, Core PCE, Personal Income & Spending, GDP, Jobless Claims, Pending Home Sales and Fed’s Beige Book

Friday: Chicago Purchasing Managers’ Index 

Eurozone 

Germany, Europe’s largest economy, has narrowly escaped a technical recession in the third quarter, but there are still concerns that its economy is facing structural headwinds. The IFO surveys will be important in communicating whether there are signs of improvement in Germany and the Eurozone area.

Monday: IFO Surveys (Germany)

Tuesday: Consumer Confidence Survey (Germany)

Thursday: Business Climate (Eurozone) and Harmonized Index of Consumer Prices (Germany)

Friday: Unemployment (Germany) and CPI and Unemployment Rate (Eurozone) 

Tuesday, 25 November 2019
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
0 0 0.084 0.031 0.122 0 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0 0 0 0 0 0 0

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