What to focus on next week:
1. The Federal Reserve will release the minutes of the November monetary policy meeting on Wednesday (November 27), mainly focusing on the content of the minutes or discussions by Federal Reserve officials regarding the impact of the U.S. election.
This week's U.S. economic data and a series of 'hawkish' remarks from senior Federal Reserve officials have directly cast a shadow over the market regarding the prospect of a rate cut by the Federal Reserve in December.
From the latest pricing in the money market, investors currently expect the probability of a Federal Reserve rate cut in December to be slightly above 50%. Furthermore, from now until the end of 2025, the rate cut is expected to be only 67 basis points.
2. On Wednesday (November 27), the market will welcome the inflation data most favored by the Federal Reserve - the October PCE inflation indicator from the United States. In addition, the U.S. will release GDP data for the third quarter and the annualized quarterly revision of the PCE.
According to the U.S. September PCE data released in October, the September PCE price index rose 2.1% year-on-year, the lowest level since early 2021, and rose 0.2% month-on-month, in line with market expectations. The core PCE price index, which is most favored by the Federal Reserve, increased by 2.7% year-on-year in September, exceeding the market expectation of 2.6%, and rose 0.3% month-on-month, the highest level since April this year.
Currently, the market expects the annualized rate of real GDP growth for the third quarter in the U.S. to be revised to 2.8%, unchanged from the second quarter's 2.8%. Meanwhile, the market expects the core PCE price index for October in the U.S. to rise 0.3% month-on-month, unchanged from the previous value.
3. Next Saturday (November 30), China will release the official PMI data for November and the Caixin Manufacturing PMI data. Based on the data released in October, the PMI in September rebounded to above the boom-bust line at 50%, recording 50.1%, an increase of 0.3 percentage points compared to last month.
In addition, according to the Caixin data for October released last month in China, it rebounded from the previous 49.3 by 1.0 percentage point to 50.3, rising back above the boom-bust line.
Data shows that manufacturing supply has increased, and demand has shifted from contraction to slight expansion. In addition, the new orders index in October reached a new high since July.
Additionally, next week the Eurozone will release the harmonized CPI data for November, with the market expecting it to return to the target level of 2%.
