What mattered last week:
- The S&P500 finished flat last week. reflecting a tug of war between positive economic data vs rising global coronavirus cases and a stalemate over stimulus talks.
- As well as uncertainty ahead of the U.S. election and a still to be resolved Brexit deal.
- Locally, the RBA delivered a significant dovish shift to its forward guidance, moving towards an inflation-targeting framework, similar to the Feds.
- While China upped the ante in its diplomatic spat with Australia by verbally instructing imports of Australian coal and cotton to be halted.
- In New Zealand, Prime Minister Jacinda Arden won re-election in a landslide result.
- Volatility, as measured by the VIX index, closed higher at 27.4.
- U.S. 10-year yields closed firmer near 0.75%.
- Gold gave back last week’s gains closing -1.62% lower, near $1900.
- Crude oil closed flat near $41.12/bbl.
- The ASX200 built on prior week gains closing another 1.22% higher at 6176.8
- In FX, the AUDUSD closed lower near .7080, impacted by policy changes in China and the dovish tones of the RBA.
For the week ahead, the key events are:
Australia: RBA meeting minutes (Tuesday).
- RBA meeting minutes (Tuesday): The minutes are expected to be dovish however they are now largely outdated following RBA Governor Lowe’s ultra-dovish speech last week.
New Zealand: NZIER business confidence and global dairy auction (Tuesday), CPI, and balance of trade (Friday).
China: Q3 GDP, employment, fixed asset investment, industrial production, retail sales (Monday).
- Q3 GDP (Monday): September quarter GDP is expected to rise by 3.2% qoq after an 11.5% qoq rise in the June quarter. This would take annual growth to 5.3% yoy.
Japan: Balance of trade (Monday), CPI, and Jibun manufacturing PMI (Friday).
U.S: Housing starts, housing permits (Tuesday), jobless claims, existing home sales, (Thursday), Markit composite flash PMI (Friday).
Canada: BoC business outlook survey (Monday), CPI, and retail sales (Wednesday).
Euro Area: German GFK consumer confidence (Thursday), German and EA Markit flash PMI’s (Friday).
- EA Markit Composite Flash PMI’s (Friday): As a result of the rise in new coronavirus cases and a tightening of restrictions, a slight fall is expected from last month's 50.4 print.
UK: CPI (Wednesday), GFK consumer confidence, retail sales, and Markit Flash PMI’s (Friday).
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