The week ahead - 4 - 8 November 2024
These are the Key Macro Events for the upcoming week.
United States – The upcoming week is dominated by the US presidential election, whose outcome is likely to have an immediate effect on various markets. In the shadows of the election, Thursday will see the conclusion of the Fed meeting, in which we expect the FOMC to decrease the policy rate by 25bps. Finally, on Tuesday the ISM services index is likely to drop back a bit relative to last month's surprisingly large increase.
Eurozone – A number of ECB officials are due to speak, and markets will be watching closely for hints on the outlook for rate cuts following the upside surprise in GDP. supports our view that the ECB will stick to a 25bp pace, and further lowers the chance of a 50bp cut in December.
Germany – Next week data on Germany’s industrial sector will be released for September. Factory orders (Wednesday) are expected to hold steady on a monthly basis. The German manufacturing PMI, released earlier, already signalled a slight deterioration in the new order subcomponent for September. Similarly, based on the manufacturing PMI we may expect a small contraction in industrial production figures for September (Thursday) compared to August. Overall, the German industrial sector remains a drag on overall growth and this is not expected to turn any time soon.
China – Most important event to watch in the week ahead will be the gathering of the NPC’s Standing Committee (4-8 November), which is expected to provide more details about the scale and timing of Beijing’s fiscal stimulus plans. Allegedly, the Chinese government is weighing the issuance of CNY 10trn (± EUR 1.3 trn) in additional debt over the next few years, but this may be increased should Donald Trump win the US presidential elections on 5 November.
UK – We expect the Bank of England to lower its policy rate by another 25bp. However, its updated projections in the Monetary Policy Report are likely to be more consequential for markets. Following the highly expansionary Budget announcement, the BoE is likely to forecast a positive output gap next year, leading to renewed upward inflationary pressure, and further reducing the scope for aggressive rate cuts. This would be consistent with our base case for a slower pace of one rate cut per quarter.