Macroeconomics: The Day Ahead – 2 December 2020

Good Morning: The Long & the Short of it and The Bigger Picture

Written by Marc Ostwald, ADMISI’s Global Strategist & Chief Economist

  • Quieter day for statistics and events: digesting Australia Q3 GDP, UK BRC  Shop Prices, awaiting US ADP Employment; Brexit, US fiscal stimulus, OPEC  and pandemic news in focus; Fed Beige Book and further raft of cen bank  speakers; German & UK debt auctions
  • US ADP: rebound expected from October, divergent pull from manufacturing and services
  • US Beige Book: focus on perceptions about near-term challenges vs.  future hope
  • Thoughts on equity rally, vaccines, fiscal stimulus, OECD forecasts and  unemployment from yesterday’s LeFonti International interview, click here to watch


As is often the case on the second working day of the month, the statistical schedule is very light, featuring overnight Australia Q3 GDP (better than expected due to a 7,9% q/q jump in Household Spending) and UK BRC Shop Prices (weakest since May as Non-Food Prices slid 3.7% y/y), while the afternoon has US ADP Employment. On the events side of the equation, news on the OPEC ‘impasse’, Brexit (though being at the ‘tunnel’ stage, this should be limited unless an agreement on a deal is reached) and yet another US fiscal stimulus bill proposal will likely command more attention, than another raft of central bank speakers and an expected no change policy decision from Poland’s NBP, though the Fed’s Beige Book should prompt some market reaction. Govt bond supply come via way of German 5-yr and U.K. 10-yr conventional & 8-yr index-linked.

In terms of the Beige Book, the primary points of interest will be how businesses view current conditions give the lack of fresh fiscal support and rising infection rates and activity restrictions, presumably not that badly outside of the hospitality sector given recent surveys, and of course how much vaccine news has boosted outlooks. The ADP Employment measure is expected to recover from a soft 365K increase in October to 520K, though it is likely to highlight a divergence between strength in manufacturing labour demand and more muted services demand, as the former continues to boost inventories, while the latter is hamstrung by activity restrictions on the back of the sharp rise in infection rates.


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