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Week Ahead Economic Preview: Week of 30 November

Published 27/11/2020, 05:02
  • Worldwide manufacturing and services PMIs
  • US jobs report, including non-farm payrolls
  • Monetary policy meetings in Australia and India, plus Powell testimony
  • Worldwide PMI surveys will provide fresh updates to global manufacturing and service sector business conditions, highlighting national and sector divergences in economic performance amid rising COVID-19 infections. The US will be in particular focus, with Fed Chair Powell's testimony before Congress on Wednesday and the monthly employment report on Friday. OPEC leaders also meet to decide on quotas in 2021 amid a climate of rising tensions and speculation as to whether current supply cuts will be rolled over.

    So far, the flash PMI data for November showed the US recovery picking up as growth accelerated in both manufacturing and services. If confirmed by the final data from IHS Markit and ISM, the upbeat surveys will bode well for another robust labour market improvement. However, the consensus at the time of writing is for another 600k jobs to be added with the unemployment rate slipping from 6.9% to 6.8%. While that would be the lowest rate since March, it would represent the smallest improvement since April's 14.7% peak, and could stoke further concerns among policymakers that the economic upturn is losing momentum.

    In contrast to the US, the European PMI data have fallen sharply amid new lockdowns to fight off second waves of COVID-19 infections. The flash eurozone and UK PMIs both slid back into contraction in November to signal an increased risk of double-dip downturns. More colour will be added from the final PMI releases, as well as more detail on country performance and sector trends. Analysts will be especially keen to see if cyclical sectors such as autos continue to perform well, offsetting weakness in consumer facing services. In the UK, progress towards Brexit trade deal with the EU will also keep markets on edge.

    In Asia, China PMIs from NBS and Caixin/IHS Markit will be eagerly awaited to assess the resilience of the recovery, though manufacturing PMIs from economies across the APAC region will provide key insights into whether raising global trade flows are helping to broaden out the recovery. Monetary policy action meanwhile comes from Australia and India, both of which are seeing signs of economic recoveries gain momentum.

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