A review of the week past and the week ahead

Charts (3)

What mattered last week:

  • In a holiday-shortened week, the S&P500 rose 2.31% following the announcement of a third effective vaccine that countered Covid19 concerns.
  • As well as President-elect Biden's nomination of former Fed Chair Janet Yellen as Treasury Secretary.
  • Economic data in the U.S was mixed. A strong gain in business PMI’s and durable goods offset weak consumer confidence and jobless claims.  
  • European economic data slowed as expected, reflecting tighter social distancing restrictions.
  • Volatility, as measured by the VIX index, closed lower at 20.8.
  • U.S. 10-year yields closed 2bp higher, near 0.84%.
  • Gold fell almost 4.5%, to close near $1787.00.
  • A fourth straight week of gains for crude oil closing over 7% higher at $45.53/bbl.
  • The ASX200 closed ~1% higher at 6601.1 taking gains in November to over 11%.
  • In FX, the AUDUSD closed the week near .7385, buoyed by strong commodity prices and broad-based U.S. dollar weakness.

For the week ahead, the key events are:

Australia: Business inventories, company profits, private sector credit (Monday), building approvals and RBA interest rate meeting (Tuesday), Q3 GDP (Wednesday), balance of trade (Thursday), retail sales (Friday).

Q3 GDP (Wednesday): Despite the shutdown in Victoria, the market consensus is for Q3 GDP to rise by 2.5% q/q.

New Zealand: Global dairy trade auction, terms of trade (Wednesday), building permits (Thursday).

China: NBS PMI’s (Monday), Caixin manufacturing PMI (Tuesday), Caixin serves, and composite PMI (Thursday).

Japan: Retail sales, industrial production (Monday), employment (Tuesday).

U.S: ISM manufacturing PMI (Tuesday), jobless claims, and ISM non-manufacturing (Thursday), employment (Friday).

  • Employment (Friday): The expectation is for a 500k increase in jobs and a small improvement in the unemployment rate to 6.8% from 6.9% in October.

Canada: GDP (Tuesday), employment (Friday).

Euro Area: German and EA inflation and German employment (Tuesday),  German retail sales, and EA employment (Wednesday), EA retail sales (Thursday), German factory orders (Friday).

UK: Nothing of note.

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