This week was all about the Fed and the latest incoming US data. On Wednesday Powell addressed markets and signposted a slower path of interest rates ahead. This sent the dollar lower, stocks higher, and supported precious metals. On Thursday the latest US CORE PCE print showed a mixed inflationary picture which slowed the move. Chinese stocks were buoyed in the first half of the week on hopes that China would pivot away from its Covid-Zero policy and could gain on further positive re-opening moves.
Other key events from the past week
- China: Covid pivot hope, Nov 28: China’s stocks enjoyed a firm bounce this week as optimism grows about a pivot away from China’s Covid-Zero policy. If this sentiment is combined with good data watch out for a potential sharp upside
- S&P500: Powell speaks!, Nov 30: The hotly awaited speech from Powell did not disappoint markets. Powell sent stocks and gold higher by signaling a slowdown in the pace of interest rates ahead, but was the message really ‘new’?
- USD: US Core PCE, Nov 24: Inflation in the US is showing signs of staying high. The Core PCE price index was revised higher for September to 5.2% and the Price Index was too to 6.3%. Too soon to say Inflation has peaked just yet.
Key events for the coming week
- China 50: China PMI’s, Dec 05: The China 50 pulled sharply away from 1200 on optimism around a pivot from China over its Covid-Zero policy. Any signs of a pick-up in China’s economy could boost the China 50 further next week unless the move is overdone now.
- Stronger seasonals approach for copper: Platinum’s seasonals are stunning around this time of the year.
- CAD: Interest Rate decision, Dec 07: Will the BoC shows more willingness to start thinking about slowing the path of interest rates like it did in October’s meeting? USDCAD is worth watching closely in case it does.