Macro Outlook for Next Week: Investors will continue to focus on Trump's transition plan, and expectations for a Fed rate cut may continue to be frustrated
PANews reported on November 16 that the Republican Party in the United States completed a triple victory this week at the White House and Congress, adding fuel to "Trump's deal". However, strong US economic and inflation data continue to reshape market expectations for the speed and extent of Federal Reserve rate cuts. This week, due to better-than-expected US retail sales and other economic data, traders increased their bets on a pause in Fed rate cuts in December, leading to hawkish reactions across markets. US stocks fell sharply with S&P 500 index down by 2.08% for the week; Nasdaq index dropped by 3.15%, marking its largest weekly decline in over two months; Dow Jones Industrial Average fell by 1.24%. As Trump's cabinet members are gradually announced, Wall Street has experienced varying degrees of tremors.
Thanks to potentially more cautious rate cut prospects under Trump's administration, the dollar index rose for seven consecutive weeks, once standing above the level of 107. The focus next week includes speeches from central bank officials around world and important data such as initial jobless claims in America:
Monday at 12:45 - Speech by Governor Haruhiko Kuroda of Bank of Japan;
Tuesday at 18:00 - Eurozone October CPI annual final value & preliminary monthly value;
Thursday at 21:00 - Initial jobless claims up until November 16th & Philadelphia Fed Manufacturing Index for November;
Friday at 1:25 - Q&A session featuring FOMC voter Charles Evans (Chicago Fed President) during a meeting;
Friday at7:30 - Japanese core CPI annual rate for October;
Friday at16:30 – Speech by ECB President Christine Lagarde during European Banking Conference;
Friday at22:45 – Final values for U.S Global Manufacturing PMI & Services PMI for November
Fridayat23:00 – Preliminary values for U.S one-year inflation rate expectation & Michigan Consumer Sentiment Index for November.
The economic calendar next week is again light. If data once again confirms the resilience of the US economy, gold prices may be even more depressed against a backdrop of further cooling expectations for Fed rate cuts. In addition, after the rally driven by U.S elections stalled, investors in U.S stocks have turned their attention to tech stocks and AI trading. Nvidia will release its earnings report next Wednesday, which will also be its first since being included in Dow Jones Industrial Average. Investors will continue to focus on Trump's transition plan including his choices for key cabinet positions; some of his initial appointments have already led to weakness in sectors such as pharmaceuticals and defense. Powell's statement on Thursday that the Federal Reserve is not eager to cut rates also caused stock market declines, so monetary policy direction may once again become a dominant factor in markets. The rise in US stocks after election has already been halved.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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