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What mattered last week and a preview of the week ahead

What mattered last week:

  • A fourth consecutive week of gains that resulted in new all-time highs for the S&P500 and the NASDAQ.
  • Supported by good September quarter earnings reports. More than three-quarters of companies that have reported thus far have beaten estimates.
  • As well as by the Fed cutting rates for the third time in 2019, and stronger than expected U.S. economic data including Q3 GDP and October jobs report.
  • And despite another delay to Brexit with the UK now set to go to the polls for a general election on December 12.
  • Locally, the ASX200 closed the week down 1% near 6670 after a poor report from ANZ and a 7% fall in the price of iron ore.
  • Increased speculation that the RBA has finished its easing cycle, helped the AUDUSD closed at its highest level in 3months near .6900c.

For the week ahead, the key events are:

Australia: Retail sales (Monday), RBA interest rate decision (Tuesday), balance of trade (Thursday), RBA Statement of Monetary Policy and home loans (Friday).

  • RBA interest rate decision (Tue): The RBA is unanimously expected to keep interest rates on hold at 0.75% to allow sufficient time for the previous three rate cuts to gain traction.

New Zealand: Employment Q3 (Wednesday), business inflation expectations Q4 (Thursday).

  • Employment Q3 (Wed): The unemployment rate is expected to rise to 4.1% in Q3 providing some payback after Q2’s strong 3.9% print and in line with slowing growth.

China: Caixin service and composite PMI (Tuesday), foreign exchange reserves (Thursday).

Japan: BoJ Monetary Policy meeting minutes (Wednesday), Reuters Tankan Index (Thursday), coincident index and leading economic index (Friday).

U.S.: Factory orders (Tuesday), balance of trade ISM non-manufacturing, JOLTS (Wednesday), Michigan consumer sentiment (Friday).

Fed speakers on the wires include Evans, Williams, Harker, and Bostic.

September quarter earnings reporting season continues with 80 companies in the S&P500 scheduled to report including Disney, Uber, and Tesla.

Canada: Balance of trade (Wednesday), Ivey PMI (Thursday), employment and building permits (Friday).

  • Employment (Fri): After strong gains of 53.7K and 81.1K in September and August, the expectation is for a modest gain of 5k with the unemployment rate rising to 5.7%.

Euro Area: EA PPI (Tuesday), German factory orders and EA retail sales (Wednesday), German industrial production and construction (Thursday), German balance of trade (Friday).

UK: Markit/CIPS UK services PMI (Tuesday), BoE meeting (Thursday).


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