Week ending 29th November 2019.

World Markets at a Glance

It was another week of mixed trade messages.

Global equity markets started the week on a positive note amid optimism that the first phase of a US/China trade deal would shortly be agreed after China said it would tighten intellectual property rules (this is what the US has been pushing for).

Unfortunately, despite comments by Donald Trump that the US and China were “in the final throes of a very important deal”, global equities pared their weekly gains when China threatened to retaliate after Donald Trump signed into law the bill supporting Hong Kong’s autonomy (Hong Kong’s special trade status will now be reviewed annually).

Away from trade talks, it looks likely that US interest rates are on hold for the time being as this week’s US economic data highlighted the resilience of the world’s largest economy:  US Q3 GDP was revised up from 1.9% to 2.1%, while durable goods orders were particularly strong (orders rose 0.6% in October after a 1.4% decline in September – and well above consensus expectations for a 0.9% decline).

The Fed’s Beige Book also signalled economic growth was improving as it now describes US growth as “modest” – it was previously “slight to modest”.

Tomorrow (Saturday 30 November 2019) Germany’s Social Democrats will announce the results of its leadership election.  A victory for Olaf Scholz (the coalition’s Finance Minister) would preserve the party’s grand coalition with Angela Merkel’s Christian Democrats, but his defeat could see the party withdraw, which could result in a snap election.

US employment data (non-farm payrolls; unemployment rate; participation rate; and average earnings) on Friday (6 December 2019) is the main economic data release for this coming week.

Elsewhere we have a flood of PMI data from around the world; and from the Eurozone we have unemployment; CPI; retail sales; and the final Q3 GDP reading.

Investment Management Team