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Macroeconomics: The Week Ahead: 8 to 12 November 2021

A preview of the week ahead from Marc Ostwald, ADMISI’s Global Strategist & Chief Economist

This week’s data schedule features US and China CPI & PPI, China Trade (this Sunday), UK Q3 GDP and monthly activity indicators, German Trade and ZEW survey, Japan Q3 GDP, Australian jobs, and inflation data in Brazil and Mexico, along with another barrage of central bank speakers, and further CEE and EM central bank rate hikes, and there will be a closed door meeting of China’s Communist Party Politburo to set the policy agenda for next year’s CCP Congress, as well as confirm Xi for a third term as President. There will be meetings of Eurozone and EU Finance Ministers, and an update on the EU Commission’s forecasts (likely to be upgrade), but a sharp acceleration in pandemic infection rates over the past 2 weeks in many countries across the EU may prove to be the bigger talking point for financial markets, along with the ponderous progress through Congress of the Biden ‘build back better’ spending bills. Thursday’s Armistice and Veteran’s Day in the US, Canada, France & Belgium will also serve to dampen trading volumes, China has its annual ‘Single’s Day’ retail event on the same day,

After another choppy week for oil and many other commodities, a series of monthly reports will be the focal point, with the EIA Short-term Energy Outlook, USDA WASDE, China CASDE & Brazil CONAB agricultural supply and demand reports, while Malaysia’s Palm Oil Board, while Malaysia’s Palm Oil Board publishes monthly data on output, exports & stockpiles. Given the various energy crises in Europe and Asia, the Flame Gas Conference in Amsterdam will also get some attention, while metals markets looks to the Shanghai Metals Market annual conference. I am looking forward to offering some thoughts on the macro outlook for commodities at the Baltic Exchange Freight Forum in Geneva on Thursday. Earnings reports will also be in focus, with the likes of Sumitomo Metal, AngloGold Ashanti Gold Fields, ArcelorMittal, Cosmo Energy, EnBW, Harmony Gold, Hellenic Petroleum, Hindalco, Kinross Gold, Mitsubishi Materials, Mitsui Mining & Smelting, ONGC, PTT Pcl, RWE, Saras & Tata Steel reporting, while BHP holds its Australian AGM, and Evraz & Polyemtal hold Investor Days.

The US and China inflation data will be front and centre in terms of statistics, even if they will merely confirm that energy price pressures continue to build, and there is no sign of supply chain disruptions easing, and per see keeping upward pressure on raw, intermediate and finished goods prices, while govts continue with what will ultimately be fruitless intervention threats, which will only add to price volatility. Base effects and energy price pressures will be they drivers of expected jumps in both US and Chinese CPI, with former seen up 0.6% m/m pushing the y/y rate to 5.9% y/y from 5.4%, while core CPI is seen up 0.4% m/m to push the y/y rate up to 4.3% from 4.0%. Meanwhile China’s CPI is set to double to a still very low 1.4% from 0.7%, primarily due to base effects (Oct 2020 CPI fell to 0.5% from 1.75), by contrast PPI is expected to surge to 25 yr high of 12.5% from 10.7%, due to commodity and energy price pressures, and no contribution from base effects.

The UK has Q3 and monthly GDP, with the former seen slowing to a still robust 1.5% q/q as the re-opening impact that paced the 5.5% q/q jump in Q2 fades, with monthly GDP seen steady at 0.4%, though with a stronger contribution from Services (0.5% m/m vs. Aug 0.3% m/m, while Manufacturing Output is set to slow to 0.2% m/m from 0.5%, continuing to be restrained by Auto Output and supply chain disruptions. But all of this is rather less material to the uncertainty about BoE policy, which will be focussed on the labour market and Q4 activity indicators. Germany’s ZEW survey is expected to ease back again on Expectations and Current Conditions, while Australia’s Employment data is expected to post a modest 50K rebound from two successive months of sharp declines, as lockdown measures were eased.

The US tops the run of govt bond auctions with $120 Bln of 3, 10 & 30-yr, while Germany offers 2 & 10-yr, Italy holds its 3 & 7-yr & long dated sales and a week-long retail BTP Futura sales, and there are also sales in Netherlands, Italy & Portugal, while the UK sells 10-yr Index Linked Gilts.

The US Q3 corporate earnings schedule is gradually winding down, but it will still be a busy week around the world for earnings, with Bloomberg News highlighting the following: Adidas, Allianz, ArcelorMittal, Assicurazioni Generali, AstraZeneca, Bayer, Berkshire Hathaway, BioNTech, Bridgestone, Brookfield Asset Management, Cathay Financial Holding, Coinbase, Credit Agricole, DoorDash, Infineon, Merck, Mizuho, National Australia Bank, NTT Data, PayPal, Siemens, SoftBank Group, Sumitomo Mitsui Financial Group, Tencent and Walt Disney.

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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.

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© 2021 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.

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