Welcome to "The Long & Short of the Week Ahead", a production of Eurizon SLJ Capital that takes a look at the macro-economic themes of the week ahead and has been recorded for professional investors.
My name is Matt, Head of Distribution for Eurizon SLJ Capital, and I'm joined by Neil Staines, Senior Portfolio Manager.
Welcome back, Neil. It's great to have you here with us again.
Thank you very much Matt. It's great to be here.
So, next week brings the start of December and whilst the end of the year is in sight, there's still an awful lot going on in markets. Perhaps you can cast your eye into the next week and tell us what you're going to be looking out for.
Yeah, thanks very much Matt It's been another complex if quieter than usual week for financial markets as the Thanksgiving holidays provides a backdrop for a market reflection This week we've had the release of the global PMI data for November where some signs of stabilization not least in Germany in the UK add to our conviction that Q3 was the peak of global growth divergence and Q4 and beyond is likely to see convergence or a renormalization in global growth dynamics. A theme that we discuss further in this week's blog. And the close of this week is likely conducted at a much slower tempo from the market perspective, but we're likely back to full speed next week. And there are a few things we've got our eye on.
Firstly, with the turkey and pumpkin pie a fading memory, next week sees the resumption of the U. S. data. We get the release of the Q3 GDP revision. Important now only to frame the slowdown into Q4, and the PCE print for November, again, is less relevant, as we know most of the components from the CPI report. Our focus will thus be more tilted toward Friday's ISM manufacturing report and more anecdotal reports from Black Friday and Cyber Monday sales, where both demand and the level of discounting could be significant indicators of the underlying growth trajectory in the U. S. The beta book on Wednesday may give more formal inference of the demand and loan dynamics and altogether may prove a more active week for U. S. Data.
Secondly, and again, relevant for our views of relative global growth, divergence or convergence the U.S. versus the rest of the world. We get some more interesting global growth data. German consumer confidence on Tuesday. Eurozone preliminary CPI for November on Thursday and the China PMI data for November on Thursday and Friday, will all add to the evolving picture of growth stabilisation in the global economy. The revised OECD economic outlook report on Wednesday may well put these data points into a global perspective, a subtle but important run of global data to look out for next week.
And then lastly, we get direct commentary from central bank governors next week. The recent rhetoric has mirrored our views of global convergence with a more dovish fed and an ECB and Bank of England that have been more inclined to push back against a more dovish market rate pricing. The ECB's Lagarde speaks to the European Parliament on Monday, Bank of England's Bailey on Wednesday, 50-year anniversary of the FX joint standing committee, and perhaps the biggest focus will be on Fed Chair Powell, who speaks in a fireside chat in Atlanta, Georgia, on Friday. With markets focused on relative central bank reaction functions, as well as absolute these three speeches will be closely watched next week.
Thank you, Neil. A lot to be looking out for in the week ahead. I have to say the Powell fireside chat does sound awfully festive. But in the meantime, we have the weekend and perhaps you can tell us what have you got your eye on?
Absolutely, we do indeed. Football's back this weekend. Premiership action returns after the international break and qualification for next summer's European Championships in Germany achieved for England and Scotland but not yet Wales. Manchester City versus Liverpool, Newcastle versus Chelsea, the pick of the weekend's action. Then it's off to Abu Dhabi with Formula One for the final race of the season. Second place in the Drivers Championships would still be the most exciting context, even if it's a very long shot for Hamilton. So overall a slightly quieter weekend for sport should leave plenty of time for a bit of Christmas shopping, Matthew.
I think it should indeed. We have the local turning on the Christmas lights this weekend. So, I've no doubt that'll keep me quite busy.
Thank you so much for joining us and for outlining your thoughts on the week ahead. I look forward to catching up with you again soon.
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