What mattered last week and a preview of the week ahead
Tony Sycamore December 9, 2019 9:50 AM
What mattered last week: U.S. equity markets recovered from a trade war-induced sell-off to close the week largely unchanged. President Trump took a more aggressive stance with China suggesting a phase one deal could wait until after the 2020 elections, reinstating tariffs on steel and aluminum imports from Brazil and Argentina as well as threatening France with tariffs.
What mattered last week:
- U.S. equity markets recovered from a trade war-induced sell-off to close the week largely unchanged.
- President Trump took a more aggressive stance with China suggesting a phase one deal could wait until after the 2020 elections, reinstating tariffs on steel and aluminum imports from Brazil and Argentina as well as threatening France with tariffs.
- Two days later tensions eased after President Trump confirmed that trade talks with China are “moving right along”.
- A bumper U.S. jobs report showed a 266,000 increase in jobs in November and resulted in the unemployment rate falling back to a five-decade low of 3.5%.
- In Australia, the RBA kept interest rates on hold at 0.75%. Domestic economic data continued to disappoint as retail sales and Q3 GDP numbers both came in lower than expected.
- A combination of trade worries and soft economic data sent the ASX200 -4% lower early last week before buyers emerged to help the index recover half of its losses, closing above 6700.
- The AUDUSD enjoying a better week closing near .6830 as the U.S. dollar fell across the board in 4 of the 5 sessions.
For the week ahead, the key events are:
Australia: RBA Governor Lowe Speech, NAB business confidence, house price index (Tuesday), Westpac consumer confidence (Friday).
New Zealand: Business NZ PMI, Westpac consumer confidence (Friday).
China: CPI (Tuesday), total social financing, new yuan loans (Friday).
- CPI (Tues): CPI is expected to slow to 3.4% in November from 3.8% in October given a decline in pork prices recently.
Japan: Tankan business survey, industrial production and capacity utilization (Friday)
- Tankan (Fri): The Tankan large manufacturer's index is expected to soften again in Q4 as is the forward-looking outlook index.
U.S.: CPI (Wednesday), FOMC interest rate meeting (Thursday morning), retail sales (Friday).
- FOMC meeting (Thur): Interest rates are expected to remain unchanged as is the forward-looking language in the statement thereby confirming the Fed remains data-dependent and unlikely to raise rates without a sustainable rise in inflation.
- Retail sales (Fri): Retail sales are expected to remain firm in November. The headline rate should rise by 0.4% while the retail “control” group (excludes autos, gasoline stations, and building permits) should come in at 0.4%.
Canada: Housing starts, building permits (Tuesday), new housing price index (Friday).
Euro Area: German balance of trade (Monday), EA and German ZEW business survey (Tuesday), industrial production and ECB interest rate decision (Thursday).
- ECB meeting (Thur): Having eased policy in the September meeting, no changes are expected to policy at this meeting. Rather, the focus will be on the new ECB President Christine Lagarde at her first governing meeting in charge to assess if she will follow in Draghi’s dovish footsteps.
UK: Balance of trade, industrial production, GDP (Tuesday), General Election (Thursday).
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