Written Commentary
A preview of the week ahead from Marc Ostwald, ADMISI’s Global Strategist & Chief Economist
This week brings month end and the usual start of month run of statistics: Manufacturing & Services PMIs, US and Canadian labour data, Japan and South Korea Industrial Production. there are also Eurozone and national CPI, US Consumer Confidence, Auto Sales, FHFA & CS House Prices and Pending Home Sales, Japan Q3 Capital Spending, Australian & Canadian Q3 GDP, with a busy run of Turkish data also likely to garner a lot of attention: CPI, Q3 GDP and Trade Balance. The events schedule is also busy with the various OPEC+ meetings, The Fed’s Beige Book and testimony from Powell on the CARES Act Relief Bill, the latest OECD Economic Outlook, numerous Fed, ECB, BoE & BOJ speakers, and StatsCan’s monthly crop production reports.
However, as noted on Friday, the emergence of a new potentially vaccine resistant Covid-19 variant will be the primary talking point, inevitably prompting fears of renewed and far reaching lockdowns (with many countries in Europe ratcheting up measures), across the globe, with much obviously depending on how quickly the medical research fraternity can establish the degree of resistance to vaccines and to treatment. In market terms, this leaves scope for much greater volatility which could prompt panic like position unwinding in individual assets and price dislocations, as well as forcing some recalibration of hedging overlays, with thinner trading volumes ahead of year end potentially exacerbating price action. Inevitably the questions then shifts to central bank narratives on policy tightening, i.e. pushing back on timelines for liquidity support withdrawal, let alone rate hikes, in turn potentially feeding the still very much engrained ‘buy the dip’ reaction. That said, further disruption of supply chains will inevitably be inflationary, but still of the variety that monetary policy is simply not equipped to deal with.
** PLEASE NOTE: Due to holidays, there will be no daily updates Monday through Wednesday **
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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.
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