The holiday-shortened week in the U.S. will be a packed one for economic data, while Federal Reserve meeting minutes will show how policy makers view adding to stimulus. Meanwhile, the most famous day of the Christmas shopping season will help to take the pulse of American consumers.
Wednesday will see back-to-back releases, with government data forecast to show that personal spending slowed somewhat in October and the third-quarter gross domestic product rebound was unrevised. Other reports include initial jobless claims, the goods trade balance, durable goods orders, new home sales and the final University of Michigan consumer sentiment index for November.
What Bloomberg Economics Says…
“The personal income and spending report will highlight the growing bifurcation between employed and unemployed Americans; we estimate a pickup in wages will be offset by a drop in unemployment insurance income, which had been bolstered by executive orders in September and may continue to recede.”
— Yelena Shulyatyeva, Andrew Husby and Eliza Winger. Read Bloomberg Economics’ full Week Ahead for the U.S.
Minutes of the Fed’s Nov. 4-5 meeting will contain discussion of options for tweaking its bond-buying to provide additional stimulus. Chair Jerome Powell told reporters after the gathering it was a “useful” exchange, and Fed watchers increasingly expect changes to be announced next month as the intensifying pandemic further dims the economic outlook. Regional Fed presidents Thomas Barkin and Charles Evans speak on the economy Monday, while James Bullard discusses monetary policy on Tuesday.
Separately, the Black Friday buying frenzy will put consumers in the spotlight. Despite expectations for subdued in-person shopping, overall spending is expected to reach a record this season due to the surge of online orders. The NPD Group predicts general merchandise sales over November and December should grow 2.5% to 3.4% from a year earlier.
Click here for what happened last week and below is our wrap of what else is coming up in the global economy.
Europe, Middle East, Africa
Key indicators of European economic activity on Monday will provide an early sign of how businesses and consumers are weathering a second round of restrictions. Economists expect the services sector to take the biggest hit.
In the U.K., attention will focus on whether the government and the European Union are edging closer to a post-Brexit trade deal. Chancellor of the Exchequer Rishi Sunak will also reveal the government’s spending priorities for the next financial year as he seeks to balance reviving the economy against repairing battered public finances.
The European Central Bank will release its financial stability review, while policy makers in Sweden are expected to leave its key rate unchanged at zero. If the Riksbank feels the need to add more stimulus, it may expand and extend its 500-billion krona ($58 billion) asset-purchase program.
Ghana’s central bank will likely keep its key interest rate at an eight-year low as it waits for earlier stimulus to filter through an economy that contracted less than forecast in the second quarter.
Nigeria may hold after a surprise cut in September, with the naira remaining under pressure and inflation quickening. In Kenya, the central bank will probably stay put after 150 basis points of cuts this year, and Angola is likely to be on hold too.
For more, read Bloomberg Economics’ full Week Ahead for EMEA
Asia
Early November export data from South Korea due Monday will offer a gauge of whether the pickup in global trade is continuing despite the resurgence of the virus. That’s ahead of the country’s central bank meeting on Thursday: The Bank of Korea is expected to keep policy on hold and will give its latest view on the growth trajectory with updated forecasts.
China’s Premier Li Keqiang holds a press conference on Tuesday after a roundtable with heads of the IMF, World Bank, WTO, OECD and others. Hong Kong’s leader Carrie Lam gives a policy address on Wednesday.
Tokyo inflation figures for November are expected to show a further deepening of price falls in Japan’s capital when that data is released on Friday. That same day, India releases its third-quarter GDP report.
For more, read Bloomberg Economics’ full Week Ahead for Asia
Latin America
Mexico’s central bank unexpectedly snapped a record easing cycle on Nov. 12, saying that policy going forward would depend upon factors affecting prices, giving due prominence to the mid-November inflation reading on Tuesday.
On Wednesday, the central bank’s quarterly inflation report updates forecasts and scenarios and may shed some light on the outlook for monetary policy. The next day, the final report on Mexico’s third-quarter output is set to fill some gaps in last month’s preliminary release. Central bank watchers surprised by the Nov. 12 “pause” wording will be eager to read the full minutes of the meeting posted a few hours later.
In contrast to Mexico’s caution, Brazil’s central bank sees inflation as “totally
– BNN Bloomberg