The Asia-Pacific (APAC) should be hogging most traders’ attention in the first half of the coming week. China and New Zealand take the spotlight up to Wednesday. A sprinkling of US and European data helps to round out the offerings.
Here's what traders should watch out for in the upcoming week.
Sunday - Monday, Nov. 21 - Nov. 22
China opens the week and reveals its PBoC Loan Prime Rate. The People’s Bank of China (PBoC) has kept the 1Y Loan Prime Rate at 3.85% for the past 18 months.
No change in the rate is expected on Monday. However, looking to a long-term change, China’s Premier Li Keqiang noted on Friday that China is facing “many challenges” in managing the downward pressure on its economic growth and rising commodity prices.
New Zealand releases data on retail sales (Q3) in the lead-up to the country’s Central Bank interest rate decision is out on Wednesday. Retail sales in the last two quarters rose 3.3% and 2.8% respectively. A projected -0.5% is expected in Q3 as the country’s largest city has been in lockdown for the entire Q3 period.
Tuesday, Nov. 23
European and Great Britain Markit PMI composite data will be released on Tuesday. Aggregating the data from the economies’ manufacturing and service sectors, the PMI is a broad indicator of economic expansion or retraction. Although still firmly within an expansionary range, a slight pullback in the PMI values is expected for both economies.
Wednesday and Thursday, Nov. 24- Nov. 25
US Markit PMI Composite data (NOV) is due. Unlike Tuesday’s PMI data, US PMI is expected to lift ever so slightly from 58.4 to 58.8.
As mentioned above, the Reserve Bank of New Zealand (RBNZ) will be updating the market as to its Interest Rate decision. A 25 basis point hike to 0.75% is all but guaranteed at this point.
Speculation of a 50 basis point hike has emerged in reaction to Inflation expectation in the country, reaching 2.96% in two years. Although, such a significant hike is unlikely and deviates from RBNZ precedence.
In the United States, for October, durable goods orders, new home sales, and personal spending data will be released in quick succession on Wednesday. Any beat or miss in the slightly optimistic forecasts for these data points should be pounced upon by traders.
The FOMC minutes will be out as well. Fed representatives have been vocal about their stance on inflation, employment, and the need to keep a loose monetary policy for the short term, all last week. These notes should be reflected in the FOMC minutes.
South Korea’s interest rate decision should be watched closely. A 25 basis point increase is possible, which would bump the interest rate to 1% from 0.75%. Analysts are split as to its likelihood as the South Korean Government has other tricks up its sleeve to curb rising prices (such as removing fuel taxes).
Friday, Nov. 26
A quiet Friday closes the week.