What to Expect in this Week Ahead: the US Economic Data Releases, the ECB’s Economic Growth Analysis, and Japan’s Prime Ministerial Election
Go Wire
November 11, 2024
GoGPT Summarizes Articles
Looking back at last week, due to the U.S. election result, the Federal Reserve interest rate cuts, and other factors, the US three major stock indexes all cumulative gained, the Dow and the S&P 500 indexes rose 4.6% in a week, getting the best single-week performance for nearly 1 year. The Nasdaq’s cumulatively increase within a week was more than 5.7%.
Other than stock performances, the U.S. oil contract and the main contract of Brent oil rose more than 1% last week, though oil production was certainly impacted by Hurricane “Rafael” on the U.S. Gulf of Mexico.
Moving on to this week, Japan will have a special parliament meeting today, November 11. The Prime Ministerial nomination election will be held in the plenary session of the House of Representatives and the Senate in the afternoon of the same day. Earlier, many people predicted that Shigeru Ishiba would be re-elected as Prime Minister and that the second Ishiba Cabinet would be formed that night.
Shifting attention to America, the US October CPI data will be released this Wednesday (Nov 13th), as well as its October PPI data released this Thursday (Nov 14th). The market participants pay close attention to both economic data. They are both projected to come in strong, likely pushing long-term rates higher and further slowing economic activity. For October, market forecasts suggest a slight rise in US headline CPI, increasing to 2.6% year-over-year from September's 2.4%. Although average gas prices dropped, food prices remained around the Fed’s 2% target. Core inflation is expected to hold steady at 3.3%, primarily driven by high rents, which have kept core inflation elevated. Recently, a greater share of non-shelter CPI items showed price growth above 3%, adding to inflation pressures.
Additionally, the potential upside risk of inflation in the US added more uncertainty to the Federal Reserve's next monetary policy. This Thursday (Nov 14th), Federal Reserve Chairman Powell will make a speech at the Fed's event in Dallas. Therefore, investors can look for more clues from his speech. Last week, the Federal Reserve lowered the target range for the federal funds rate by 25 basis points, meeting market expectations. Although Powell did not give any clues that may pause to cut interest rates in the near term after this rate cut, Wall Street gradually expected the Fed to slow down the pace of interest rate cuts. Nomura economists cut the expected number of Fed rate cuts next year to one from the previous four. Similarly, Deutsche Bank believed that the Fed had the possibility of a pause in rate cuts this December.
The week’s focus ends with the event from Europe. This Thursday (Nov 14th), the European Central Bank will publish the minutes of the October monetary policy meeting. Hence, investors can focus on the ECB's specific analysis of inflation and economic growth. Recent data shows that eurozone inflation has fallen below the ECB's 2% target, making economic growth the focus of the ECB. This week, the European Commission will also publish the revised annual rate of eurozone GDP for the third quarter of this year. It deserves equal attention.
