THE last week of October was rich in events and unexpected incidents, such as WTO decision to give China the right to impose US$3.579bil in tariffs on US industrial goods for failing to remove anti-dumping duties.
In addition, the S&P reached another record high thanks to a strong monthly jobs report; third consecutive rate cut and non-farm payrolls registering 128,000 m/o/m, above the expected increase of 90,000.
In other news, the EU agreed to extend the Brexit deadline until January 31st. On the negative side, we could outline doubts coming from Chinese officials on reaching a comprehensive long-term trade deal with the US.
So far, the earning season is doing much better than anticipated, mainly thanks to strong results from giants like Apple and Facebook (and that is despite the trade war and, in the latter case, ongoing antitrust investigation).
With a recent 25 bp cut from the Fed and solid earnings, U.S. stock markets could register another bullish jump if the following companies achieve to deliver positive results:
Uber (green numbers could restore confidence in the industry), Square, Grifols S.A., Pacific Gas & Electric Co., Qualcomm, Disney and, of course, Activision Blizzard.
We also find it important to mention that the World Bank revised down commodity prices due to global growth weakening and consequent demand decrease.
According to an official statement, crude oil prices are projected to average US$60 per barrel in 2019 and weaken to US$58 per barrel in 2020. These forecasts are US$6 per barrel and US$7 per barrel lower than anticipated in the April Commodity Market Outlook.
Metal prices are also projected to fall 5 percent in 2019 and continue to slide next year as slowing global demand weighs heavily on the market.
Also precious metals, which have risen sharply this year, are anticipated to make further gains in 2020 in response to heightened global uncertainty and accommodative monetary policies.
Agriculture prices are anticipated to decline this year but stabilize in 2020.The most important economic events to watch out for:
• AUD TD Securities Inflation (YoY) (OCT)
• AUD Retail Sales Ex Inflation (QoQ) (3Q)
• CHF SECO Consumer Confidence (4Q)
• GBP Markit/CIPS UK Construction PMI (OCT)
• USD Durable Goods Orders (SEP F)
• EUR ECB President Lagarde Speaks in Berlin
• AUD AiG Performance of Service Index (OCT)
• JPY Monetary Base (YoY) (OCT)
• CNY Caixin China PMI Composite (OCT)
• CNY Caixin China PMI Services (OCT)
• AUD RBA Cash Rate Target (NOV 5)
• USD Trade Balance (SEP)
• USD ISM Non-Manufacturing/Services Composite (OCT)
• NZD Employment Change (YoY) (3Q)
• JPY BOJ Minutes of September Policy Meeting (SEP)
• EUR German Factory Orders n.s.a. (YoY) (SEP)
• EUR ECB Vice-President Guindos speaks in Frankfurt
• USD DOE U.S. Crude Oil Inventories (NOV 1)
• AUD AiG Performance of Construction Index (OCT)
• AUD Trade Balance (SEP)
• CNY Foreign Reserves (OCT)
• EUR German Industrial Production n.s.a. and w.d.a. (YoY) (SEP)
• GBP Office for Budget Responsibility publishes updated forecasts
• EUR EU Commission Economic Forecasts
• GBP BOE Asset Purchase Target (NOV)
• GBP Bank of England Bank Rate (NOV 7)
• MXN CPI (YoY) (OCT)
• GBP BOE's Carney speaks at press conference in London
• CNY Trade Balance (OCT)
• GBP United Kingdom Sovereign Debt to be rated by Moody's
• CAD Net Change in Employment (OCT)
• USD U. of Mich. Sentiment (NOV P)
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