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Mark O' Donnell
Research Analyst
November 30, 2020

This week ahead: CPI, NFP & RBA Interest Rate Decision

This week ahead: CPI, NFP & RBA Interest Rate Decision

As Europe enters into the late stages of their respective lockdowns, it looks like the Coronavirus story may be starting to reach its end. Worldwide cases have started to plateau, with only a couple of countries where the Coronavirus cases continue to rise. For example, the United States broke the grim record of 200,000 cases per day, and Brazil's cases continue to increase. This week ahead contains a plethora of data releases from various countries, so stay tuned.

Eyes on Governor Lowe of the RBA on the banks' Interest Rate decision this week ahead

Monday, 30th November – China Non-Manufacturing PMI

After essentially stamping out the virus, China continues to excel in its recovery. For the right part of 6 months, China's Coronavirus cases have stayed relatively flat, showing their strict Coronavirus strategy's effectiveness. While their politics has remained relatively tame, geopolitical pressures with other countries have started to simmer, most notably with Australia. China recently slapped Australia with a 200% tax on Australian wine as Australia ramps its probe on where the Coronavirus originated in China. This is on top of tariffs on beef, coal, barley, seafood, sugar, and timber. China's PMI's are expected to drop to 52.1 from 56.2 the month before.

Monday, 30th November – Germany CPI

Merkel's summary of Germany's near future portrays how the Coronavirus has played out in Germany in the past couple of weeks. She stated, "We're in for a tough winter, but it will come to an end.,.. My wish for us all is that we act responsibly and stand up for each other." Coronavirus cases in Germany, like many in countries in Europe, have skyrocketed. A premature de-restriction in lockdown measures, alongside summer travel, have pushed Coronavirus cases further higher. That said, analysts predict no change in CPI growth, with a predicted figure of -0.5%.

Monday 30th November, Tuesday 1st December and Thursday 3rd December - ECB Lagarde Speech, Europe CPI and Retail Sales

With the ECB offering over 1.8 Trillion euros of Stimulus alongside 0% interest rates to help support the European Union, the central bank is looking for additional ways to push the bloc out of the recession. The ECB President, Christine Lagarde, continues to stress that the bank's role is to ensure that "the financing conditions are stable, and are conducive to economic recovery is it comes." With two consecutive speeches, traders and investors should watch out for wild whipsaws in the Euro this week. Furthermore, the European Union is set to release the CPI figures this week, with analysts predict the CPI to fall at a slower rate at 0.2%, as suppose to 0.3% the month before

Tuesday 1st, Wednesday 2nd, and Friday 4th December – RBA Interest rate Decision, Governor Lowe Speech, and Retail Sales

The Reserve Bank of Australia has pumped over 100 Billion Australian Dollars into the Australian economy. So far, it seems like it's been working, signaled by dampened currency appreciation and lower bond yields. Analysts predict that the Australian dollar will outperform the New Zealand dollar, with Martin Whetton, head of fixed income and currency strategy, and Commonwealth Bank of Australia stating that "New Zealand exports are more exposed to the U.K., the eurozone and the U.S. than Australia,." With the recent success Australia has been having to the Coronavirus, alongside positive responses from the quantitative easing the RBA has been implementing, analysts predict the RBA will keep rates as is at 0.1%. Retail sales are also going to be released this week ahead.

Tuesday 1st, Wednesday 2nd, and Friday 4th December – U.S. ISMs, Fed Powell speak, and NFP

As the President's transition from Donald Trump to Joe Biden gets underway, this week ahead will be a busy week regarding the data coming out from the United States. With Coronavirus cases continuing to rise with no end in sight, analysts predict a drop in the U.S. ISMs from 59.3 to 57.5. NFP figures are also coming out this week ahead, with analysts predicting a decline from 638k last month to 520k this month. Furthermore, expect Chairman of the Fed, Jerome Powell, to reiterate his support for the United States economy.

A lot of data coming out this week. Stay safe, Trade safe.

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