Macroeconomics: The Day Ahead – 18 November 2020
Good Morning: The Long & the Short of it and The Bigger Picture
Written by Marc Ostwald, ADMISI’s Global Strategist & Chief Economist
- Digesting better than expected Japan exports, UK inflation indicators & EU27 auto sales; US Housing Starts and Canada CPI ahead along with further rash of central bank speakers; German, UK & US debt sales; pandemic news still very much dominant, though conflicting
- US Housing Starts: further record for NAHB points to solid Starts, capacity constraints the key near-term headwind
At the risk of being rather repetitive, the day’s schedule has a goodly volume of major economic data and policymaker events today along with bond auctions in Germany, UK and USA, and more retailer earnings reports, but markets are unsurprisingly attempting to figure out how to react to hefty divergence in signals on the pandemic, i.e the continued surge in infection rates and the resultant increasing restrictions on activity, and on the other hand the hope offered by vaccine news. This ‘push me, pull you’ narrative is a recipe for spikey volatility, and would appear likely to be front and centre through year and into Q1. That said, it is the case that Asia is clearly faring a lot better than Europe or the Americas, and this does not appear to be just a transient trend.
Statistically there are Australian Wages, the full gamut of UK inflation data (slightly higher than expected due ot food and clothing prices, though mostly due to seasonal adjustment and base effects) and EU-27 auto sales to digest ahead of CPI data from the Eurozone (final) and Canada, while the US has Housing Starts, while policy meetings in Iceland and Thailand are expected to see rates left on hold. Canada’s headline CPI so expected to remain very subdued at 0.4% y/y, though core measures are expected to remain only modestly below the BoC’s 2.0% target at 1.8%/1.9%, where they have been for most of the past 3 years. US Housing Starts follow on from yet another record high (90) for the NAHB Housing Market Index, with the NAHB noting “Historically low mortgage rates, favourable demographics and an ongoing suburban shift for home buyer preferences have spurred demand and increased new home sales by nearly 17 percent in 2020 on a year-to-date basis. Though builders continue to sign sales contracts at a solid pace, lot and material availability is holding back some building activity.” Starts are expected to post another solid 3.2% gain to SAAR 1.46 Mln, and any miss relative to forecasts likely to be down the constraints cited by the NAHB.
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.