Market Analysis

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November 23, 2020 10:56 am

Fundamental Forecast for the week of November 23 – 27, 2020

Monday, November 23

 

The beginning of the week will be very busy, which happens quite rarely. Numerous publications began with data on retail sales in New Zealand in the third quarter: the indicator increased by 28% q/q, and in annual terms, sales increased by only 8.3%. The previous figures were noted at the level of -14.6% and -14.2%. This impressive growth provided significant support to the New Zealand dollar.

 

Then you should pay attention to the preliminary data on PMIs in Australia. The index of activity in the manufacturing sector was 56.1 points, and the index of business activity in the services sector was at 54.9 points. All data turned out to be better than forecasts.

 

Then a whole block of statistics from the eurozone was presented. The index of business activity in the manufacturing sector in Germany rose to the level of 57.9 points, which is better than the forecast of 56.5. Activity in the service sector fell slightly short of the forecast and amounted to 46.2. The composite index of business activity of the entire eurozone came out worse than expected: 45.1 points against expectations of 45.8.

 

The pound sterling may get support on Monday, as the composite PMI index came out better than expected: 47.4 points against expectations of 42.5. Manufacturing PMI also improved, rising to 55.2 points. The forecast assumed 53.3 points.

 

In the evening hours, the United States will provide similar data. Experts predict a decline in absolutely all business activity indices in the US.

 

Tuesday, November 24

 

Tuesday will become a kind of respite between Monday and Wednesday, since the macroeconomic calendar is practically empty on this day. Of interest is only data on GDP in Germany for the III quarter: experts predict that the indicators will remain at the same level 8.2% in quarterly terms and -4.1% in annual terms. A little later, Germany will share statistics on the IFO Business Climate Index in November.

 

You can also pay attention to the data on house prices in the United States, the growth rate of which may accelerate from 5.2% to 5.5%, as well as the consumer confidence index.

 

Wednesday, November 25

 

Wednesday will be the busiest and most important day of the week, although statistics will be released mainly for the United States only. It all starts with the publication of data on orders for durable goods, which could grow by 0.5%. Then you should pay attention to the second estimate of GDP for the third quarter, which may be slightly better than the first. In particular, it is expected that the rate of economic decline slowed down not to 2.9%, but to 2.8%. Whereas according to the results of the second quarter the rate of economic decline was 9.0%.

 

Also on Wednesday, data on claims for unemployment benefits will be released, as Thursday and Friday in the States will be the weekend in honor of Thanksgiving Day. Experts predict that despite the expected increase in the number of initial applications from 742 thousand to 770 thousand, the number of repeated applications may decrease from 6,372 thousand to 6,000 thousand. So, in general, data on the labor market may be rather optimistic.


Thursday, November 26

 

Thanksgiving is celebrated on Thursday in the United States, and Friday will be an abbreviated day. It is expected that in the absence of American market participants there will be practically no activity on the exchanges. Macroeconomic calendar on Thursday is also almost empty. Only the publication of the minutes of the ECB meeting on monetary policy can cause interest.

 

Friday, November 27

 

Due to the ongoing weekend in the United States, activity on the financial markets on Friday will be minimal, as well as the number of economic publications.


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