Week Ahead

Joe Biden is projected to win the US Presidential elections and it is going to be interesting to watch the market reaction. Elsewhere, Brexit talks and the third-quarter earnings season will also continue to dominate the headlines. GDP updates from the Eurozone, UK, Russia, Malaysia and Philippines will be keenly watched, alongside US, China and India inflation data; US and Australia consumer sentiment; UK jobs data and foreign trade; Eurozone and India industrial output; and Japan current account and machinery orders. Central banks in Mexico and New Zealand will be deciding on interest rates.

Investors across the globe awaited the outcome of the US presidential election, as vote counting continued in battleground states of Georgia, Pennsylvania, Nevada, Arizona and North Carolina. To win the presidency, Mr Biden, who is approaching 270 electoral votes, needs to get Pennsylvania or two of the other four remaining states. Mr Trump, meanwhile, needs to win Pennsylvania and three of the remaining four states. As of Saturday morning, Biden maintained the lead in Georgia, Pennsylvania, Nevada and Arizona, while Trump was leading in North Carolina.

In the US, the consumer price report for October is set to highlight a slowdown in inflation rate from September’s six-month high, with the latest number set to remain well below the Federal Reserve’s target of 2 percent amid subdued demand due to the coronavirus crisis. At the same time, the preliminary reading of Michigan consumer sentiment for November will likely show a slight improvement in morale despite the US presidential election uncertainty. Other notable publications include producer prices, JOLTs job openings, IBD/TIPP Economic Optimism, and the government’s monthly budget statement.

Elsewhere in America, the central bank of Mexico will probably leave interest rates at the current level when they meet on Thursday. Important data to follow include Mexico inflation rate and industrial output, and Brazil retail trade and business morale.

Overseas, EU and UK negotiators will resume trade negotiations next week, as both sides race to reach a deal amid divisions on key issues such as “level playing field” conditions for business and fishing access rights. On the economic data calendar, the UK will release third-quarter GDP, along with higher frequency industrial production, foreign trade, construction output and the jobs report. Most likely, the economy rebounded at a record pace in the three months to September, after a historical contraction in the previous period. Still, monthly figures from the ONS are expected to show that the GDP growth slowed in September and the jobless rate climbed to the highest level in almost four years, amid a second wave of COVID-19 infections.

Elsewhere in Europe, key economic data include: the Eurozone second estimate of third-quarter GDP, foreign trade and industrial production; Germany investor morale, foreign trade and wholesale prices; the Netherlands, Norway, Poland and Russia third-quarter GDP figures; France third-quarter unemployment; Switzerland unemployment; Sweden and Ireland inflation rates; and Turkey industrial activity, retail trade and jobless rate.

In Asia, China will be publishing consumer and producer prices for October, with markets pointing to a slowdown in inflation rate to the lowest since February 2017 while producer deflation will probably ease slightly. Other important releases include monetary indicators, foreign direct investment and vehicle sales. Elsewhere, the Bank of Japan will publish the summary of opinions from board members of its October meeting. On the economic data front, key data includes current account, machinery orders, producer prices, Reuters Tankan index, and Eco Watchers Survey.

Meanwhile, investors in Australia will turn their attention to NAB business confidence and Westpac consumer confidence. Across the Tasman Sea, the Reserve Bank of New Zealand will hold its monetary policy meeting on Wednesday.

Other highlights for the Asia-Pacific region include: India inflation rate and industrial production; Malaysia third-quarter GDP, jobless rate, industrial output and current account; the Philippines third-quarter GDP; South Korea unemployment; and Indonesia current account, retail sales and consumer morale.