Macroeconomics: The Day Ahead – 1 November 2020
Good Morning: The Long & the Short of it and The Bigger Picture
Written by Marc Ostwald, ADMISI’s Global Strategist & Chief Economist
A new week gets under way with the usual raft of Manufacturing PMIs, which in contrast to Wednesday’s Services PMIs will likely confirm that the sector recovery remains robust, even if the pace of expansion is starting to “normalize”, whatever “normal” in a Covid-19 world is meant to mean. Governments are above all at pains to ensure that this, and the resource and agricultural sector can continue to operate at relatively “normal” levels, as long as health security measures are observed. The week as a whole is clearly dominated by tomorrow’s US presidential and congressional elections, with markets hoping for an outcome that is clear enough to avoid recounts and legal battles. Otherwise there are plenty more corporate earnings in the US, Europe and Asia, along with the Fed and BoE meeting. The FOMC meeting is not expected to see any changes in policy measures, though the fact that additional fiscal measures have not materialized, and the escalating level of infection rates would more than justify further policy action, even if a number of FOMC members have made it clear that they are sceptical about the efficacy of more monetary stimulus to counter the effects of the pandemic, even if the FOMC mantra this year has been about acting pre-emptively. As for the BoE, a further £100 Bln of QE is expected, and there will doubtless be the hint of more policy action given that the latest ‘lockdown’ measures will hit the UK economy hard (and most of Europe too), a rate cut is for the time being off the table, and until such time as the numerous complex technical issues can be overcome. In terms of the US data, Auto Sales and Friday’s labour data will be the main items, with Auto Sales expected to start levelling out at a respectable 16.5 Mln SAAR pace vs. September’s 16.3 Mln, below but still far off the 2019 average pace of 16.85 Mln. The consensus looks for a somewhat slower pace of Payrolls growth at 610K vs. September’s 661K, with much depending on how the stronger labour demand evident in the Claims data and surveys is offset by rising permanent layoffs as Congress failed to replace the Payroll Protection Programme (PPP) and the assumption that census related hiring will likely tail off, along with the fact that the seasonal adjustment assumes a strong level of holiday (Thanksgiving) related hiring, which may prove to be sluggish.
To view the full report and to sign up for daily market commentary please email email@example.com
The information within this publication has been compiled for general purposes only. Although every attempt has been made to ensure the accuracy of the information, ADM Investor Services International Limited (ADMISI) assumes no responsibility for any errors or omissions and will not update it. The views in this publication reflect solely those of the authors and not necessarily those of ADMISI or its affiliated institutions. This publication and information herein should not be considered investment advice nor an offer to sell or an invitation to invest in any products mentioned by ADMISI.
© 2020 ADM Investor Services International Limited.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.