The week ahead - 18 - 22 November 2024

United States – A calm week for US data releases. We expect the S&P manufacturing PMI to revert to trend at 48.0, while the services PMI remains high at 55.0. After this week's surprisingly hawkish speech by Fed Chair Powell, markets will be looking at the upcoming appearances by Fed officials more closely.

Eurozone – On Friday, the eurozone PMIs for November will be published. PMIs are expected to remain roughly stable compared to October, with the manufacturing PMI staying in contractionary territory while the services PMI remains above 50, signaling expansion. Overall, as indicated by last week's Q3 GDP data (0.4% q/q), the PMIs may slightly overstate economic weakness. We expect the eurozone's economic expansion to continue, albeit at a slower pace, and have projected a 0.2% quarter-on-quarter growth for Q4.

Q3 negotiated wages (Thursday) are likely to show a rebound following the pullback in Q2. A host of ECB governing council members are due to speak, which will be the last opportunity to guide market expectations before the blackout period for the December meeting.

The Netherlands – Unemployment is expected to come in at 3.8% for October (September: 3.7%), as temporary factors – like the low number of bankruptcies coming out of the pandemic – are unwinding. With 1.06 vacancies per unemployed, the labour market remains tight, although this tightness has eased from its peak. In the third quarter, labour demand declined and less new vacancies were created. The unemployment rate rose marginally as there were less job finders and more job losers. Generally, the unemployment rate is expected to remain low in the years to come due to strong labour demand and limited labour supply, given the greying population.

China – As the PBoC kept its 7-day reverse repo rate on hold since September and with the yuan weakening versus US dollar following Donald Trump’s victory in the US presidential elections, we do not expect changes in the 1-year medium-term lending facility rate (decision scheduled between 15 and 25 November) and the 1-year loan prime rate (Wednesday 20 November) for now. That said, going forward we expect additional RRR and policy rate cuts - and more fiscal support, partly to offset the drags from the assumed flaring-up of the bilateral tariff war with the US under Trump 2.0.