- MON: PBoC LPR & Israel Policy
Announcements; German Producer Prices (Oct), US National Activity Index (Oct),
New Zealand Trade Balance (Oct), UK CBI Orders (Nov) - TUE: EZ Current Account (Sep),
Canadian Retail Sales (Sep), EZ Consumer Confidence Flash (Nov), US Richmond
Fed (Nov), Australian PMIs Flash (Nov) - WED: RBNZ Policy Announcement,
Japanese Holiday; EZ, UK & US PMIs Flash (Nov), US Durable Goods (Oct),
University of Michigan Final (Nov), US New Home Sales (Oct) - THU: Riksbank, CBRT & SARB Policy
Announcements, ECB Minutes (Oct), US Thanksgiving; German Ifo (Nov) - FRI: US early-close, CBRT Financial
Stability Report; UK GfK (Nov), German GDP Detailed (Q3)
NOTE: Previews are listed in day-order
PBoC LPR (Mon):
The PBoC’s Loan Prime Rates (LPRs)
are expected to be maintained with the 1yr at 3.65% and the 5yr at 4.30%.
Expectations for an unchanged decision arise from the One-Year Medium-Term
Lending Facility Rate (MLF) being maintained at 2.75%. Desks suggest that China
is walking on a tightrope after the PBoC’s decision in August to lower key rates
accelerated the Yuan’s decline since, whilst the fresh wave of COVID infections
across the nation has hit the raft of activity data from the second largest
economy in the world. “Any fresh monetary policy stimulus will be largely
dependent on credit demand, which tumbled more than expected in October”,
according to ANZ’s China Strategist, who also noted that the PBoC will
“continue to maintain ample liquidity, but chances for an interest rate cut are
low.”
RBNZ Policy Announcement (Wed):
The RBNZ is widely expected to
raise its Cash Rate at the upcoming meeting, with 15 out of 23 analysts polled
by Reuters forecasting a 75bps move, while the rest lean towards 50bps. The
calls for a hike come amid hot inflation at 7.2% Y/Y in Q3 – well above the
RBNZ’s 1-3% target – which comes in conjunction with a tight labour market.
ANZ, ASB, Kiwi Bank, BNZ, and Westpac all forecast a 75bps hike on Wednesday.
Analysts at ANZ suggested “The RBNZ has already proven that it’s not in the
least afraid to go its own way, and the global tilt towards slower hikes is
unlikely to play a significant part in the decision… We are forecasting the OCR
to peak at 5.0%, via another 75 bp hike in February on a ‘let’s just get it
done’ basis. If data cools more rapidly than expected the RBNZ could well slow
the pace at that point.”
Eurozone Flash PMI (Wed):
Expectations are for November’s
manufacturing PMI to fall to 46.0 from 46.4, services to decline to 48.0 from
48.6, leaving the composite at 47.07 vs. prev. 47.3. The prior report was
characterised by a deeper decline into contractionary territory as both
manufacturing and service industries lost ground. S&P Global observed
“After a weak third quarter of PMI and official GDP data, the latest survey
results for the start of the fourth quarter suggest the eurozone economy is now
headed for a winter recession”. This time around, analysts at Investec suggest
that “October’s reading points to a weak start to Q4, where we ultimately
expect a contraction in GDP”. The desk adds that “with little in the way of
major news to shift the economic narrative and inflation still high (10.6% in
October) we expect economic conditions to remain weak”. From a policy
perspective, the December meeting is increasingly likely to see a step down
from 75bps to a 50bps increment with hawkish policymakers doing little to talk
up a 75bps move. ING posits “with a view to the December meeting we caution
that the ECB’s hawks might ask for more progress on quantitative tightening in
return for less aggressive action on rates”. Note, a disappointing reading
could refocus minds over the 2023 outlook which sees the deposit rate currently
seen peaking at around 3% in the summer.
UK Flash PMI (Wed):
Expectations are for November’s
services PMI to decline to 48.0 from 48.8, manufacturing to fall to 45.5 from
46.2, leaving the composite at…
Read More: Newsquawk Week Ahead: Highlights include Fed & ECB mins, PBOC, RBNZ, Flash PMI’s