Macroeconomic/ geopolitical developments
- Fed speakers started to pivot to dovish, with typical hawks Waller and Mester signalling support and confidence in the current policy. Powell acknowledged the steady slowdown in inflation but refrained from discussing potential interest rate cuts.
- Short end US Bond yields plunge, marking the most remarkable month since the ’80s and triggering a broad market rally.
- US GDP data stronger than previously thought, with the second estimate revealed a 5.2% annualised pace for Gross Domestic Product, surpassing the initial 4.9% reading and economist forecasts of 5%
- US PCE data as expected, reporting a yearly inflation rate of 3% in October, slightly below the previous month’s 3.4%.
- US Manufacturing PMI data signals sustained contraction, with the S&P Global PMI holding at 49.4, a three-month low, and the ISM Manufacturing PMI remaining at 46.7, below expectations.
- EU CPI data dropped to 2.4%, the lowest since August 2021, down from October’s 2.9% and lower than predictions of a decrease to 2.7%.
Global financial market developments
- US and global equity index futures consolidated and nudged higher, building on the November surge, staying fully in bull mode.
- US and global yields saw significant lower yield moves to multi-week yield lows..
- The US Dollar Index pushed lower again, then bounced, but stayed in bear mode.
- Gold futures rallied further to a multi-month high.
- Oil futures failed lower post OPEC+ near to recent lows, sustaining bearish forces.
Key this week
- Central Bank Watch: The Fed has now entered its blackout period before the December meeting, so no Fed speakers this week. We get the Reserve Bank of Australia’s Interest Rate Decision and statement on Tuesday and the Bank of Canada’s Interest Rate Decision and statement on Wednesday.
- Macro Data Watch: A flurry of global data on Tuesday, with S&P Global Services and Composite PMI being released prior to US ISM Services PMI. Friday, we get the always much watched US Employment report.
| Date | Major Macro Data |
| 12/04/2023 | Nothing of note |
| 12/05/2023 | Australia RBA Interest Rate Decision; global S&P Global Services and Composite PMI, US ISM Services PMI |
| 12/06/2023 | Australian GDP; EU Retail Sales; BoC Interest Rate Decision and Statement; US ADP Employment Change |
| 12/07/2023 | China Trade Balance; EU Employment Change and GDP |
| 12/08/2023 | Japan GDP; German CPI; US Employment report; Michigan Consumer Sentiment Index |
