Investing.com – Following a busy week of news, which included the announcement of a new Federal Reserve chair and the Bank of England raising interest rates for the first time in more than a decade, global financial markets will focus on Chinese trade figures in a relatively quiet week for economic data.
Investors will also keep an eye out on a few U.S. economic reports, with Friday’s consumer sentiment data in the spotlight, to gauge how it will impact the Federal Reserve’s view on monetary policy in the months ahead.
In the UK, traders will focus on manufacturing production data for further indications on the continued effect that the Brexit decision is having on the economy.
Monetary policy announcements from the Reserve Bank of Australia and the Reserve Bank of New Zealand will also be on the agenda.
Ahead of the coming week, Investing.com has compiled a list of the five biggest events on the economic calendar that are most likely to affect the markets.
1. China Trade Figures
China is to release October trade figures at around 0300GMT on Wednesday. The report is expected to show that the country’s trade surplus ballooned to $39.5 billion last month from a surplus of around $28.5 billion in September.
Additionally, the Asian nation will publish data on October consumer and producer price inflation at 0130GMT on Thursday. The reports are expected to show that consumer prices rose 1.7% last month, while producer prices are forecast to increase by 6.3%.
Soft PMI data on manufacturing and non-manufacturing activity last week indicated the Chinese economy is slowing going into the fourth quarter of the year.
2. U.S. Michigan Consumer Sentiment Data
The preliminary University of Michigan November consumer sentiment index scheduled for release at 10:00AM ET (1500GMT) on Friday is expected to inch up to a fresh 13-year high of 101.0 from 100.7 in October, which was the highest level since the start of 2004.
On the central bank front, Janet Yellen, the outgoing Fed chair, will deliver acceptance remarks at the presentation of the Paul H. Douglas Award for Ethics in Government, in Washington DC at 2:30PM ET (1930GMT) on Tuesday.
Last week, President Donald Trump named Fed Governor Jerome Powell to replace Yellen when her term ends in February. Powell is viewed as similar to Yellen on monetary policy and more dovish than other members of the Fed.
Comments from New York Fed Chief William Dudley and Governor Randal Quarles will also be in focus this week.
The Fed left rates unchanged last week in a widely expected decision, but further sharpened expectations for a year-end rate hike by highlighting “solid” economic growth and a strengthening labor market.
The central bank is scheduled to hold its final policy meeting of the year on Dec. 12-13, with interest rate futures pricing in a 100% chance of a rate hike at that meeting, according to Investing.com’s Fed Rate Monitor Tool.
Meanwhile, in the stock market, struggling chain-store retailers such as Macy’s (NYSE:M), Nordstrom (NYSE:JWN), Kohl’s (NYSE:KSS) and JC Penney (NYSE:JCP) report results, as do a number of smaller chain stores, in what will be the last big wave of the third-quarter earnings season.
On the political front, tax reform will likely be at the back of investors’ minds, as markets look for any new developments on the Trump Administration’s tax bill. Rep. Kevin Brady, chairman of the House of Representatives tax writing committee, said he plans to offer an amendment making improvements to the bill on Monday.
Headlines from Trump’s trip to Asia, which include visits to Japan, South Korea, China, Vietnam and the Philippines, will be in focus. Security concerns in the Korean peninsula and the South China Sea will grab a lot of attention, but investors will also look at trade talks.
3. UK Manufacturing Production
The Office for National Statistics is to produce data on UK manufacturing production for September at 0930GMT (4:30AM ET) on Friday, amid expectations for a 0.3% increase. Industrial output is forecast to inch up 0.3%.
The Bank of England raised interest rates for the first time in more than ten years last week but said it sees only gradual rises ahead as Britain prepares to leave the European Union.
Politics is likely to be at the back of investors’ minds, as they keep an ear out for any news regarding the Brexit negotiations.
4. Reserve Bank of Australia Policy Meeting
The RBA’s latest interest rate decision is due on Tuesday at 0330GMT.
Most economists expect the central bank to keep rates unchanged at the current record-low of 1.5% for the 14th straight meeting and maintain its neutral policy stance, as it balances the risk of fueling further borrowing in the country’s red-hot property market against tepid inflation.
Tuesday’s policy decision will be followed by the RBA’s quarterly monetary policy statementon Friday.
The Australian dollar has been under pressure lately after recent data showed domestic inflation unexpectedly dipped in the third quarter and retail sales had their weakest quarter since 2010.
5. Reserve Bank of New Zealand Rate Review
The Reserve Bank of New Zealand’s monetary policy update is due at 2000GMT on Wednesday.
Most market analysts expect the central bank to hold its benchmark interest rate at the current all-time low of 1.75%, where it has been for the last six meetings, when it was last reduced.
The RBNZ’s new acting governor Grant Spencer will hold a press conference shortly afterwards to discuss the decision.
Market jitters about the new Labour-led government’s economic agenda have led to a sharp sell-off of the New Zealand dollar in recent weeks.