Podcast: Eurozone inflation. PCE Price Index and ISM Manufacturing PMI from the US.

Created: 27th November 2023

So, what do we know?

(A forex, index, and commodity market review) Another extension to the “risk-on” market theme last week as US and major global markets recorded further gains in the Thanksgiving shortened week.

Weekly change (amount change and percentage change on the week)


FTSE       -18 -0.23%

DAX        +84 +0.53%

DOW       +464 +1.32%

S&P         +46 +1.02%

NASDQ    +145 +0.92%

NIKKEI      +227 +0.67%

Hang Seng Unchanged


US markets remained in optimistic mood ahead of the start of the key retailing Black Friday / Cyber Monday sales bonanza. The focus this week will be on footfall and sales volumes as major retailers’ fortunes depend on the outcome of the Black Friday weekend sales which usually provides a good indicator for the run up to the New Year.


With inflation falling, consumers are expected to flock to the shops in record numbers although retailers are having to offer steep discounts to capture those sales.


In the Eurozone, markets were bolstered by better-than-expected flash manufacturing and services data, albeit both readings remain below the all-important 50 level.


In the UK there was a surprise jump in the GfK Consumer Confidence report which came in at -24 versus -28 expected which raised hopes that retail spending in the run-up to Christmas would be better than forecast. In response Gilt yields jumped again as traders expect the Bank of England to hold rates at current levels for longer, which also pushed Sterling up to its highest level since early September.


EURUSD       +0.25 +0.23%

GBPUSD       +1.42 +1.14%

USDJPY        -0.13 -0.09%


The US Dollar lost further ground against major currencies as traders dump US Dollars in reaction to the belief that rates will start to be cut from as early as May next year. This contrasts with some major banks’ forecasts (JP Morgan and Citi) only in mid-October, which suggested the Euro could hit parity versus the US Dollar by year-end. A lot has changed since then.

What is not in doubt is that expectations have shifted over the past month, with investors now believing the Fed has concluded its tightening cycle and that the next move in rates will be lower, as early as May next year which is currently standing at 60/40 odds.

What is questionable is whether the ECB, BoE and other Central Banks have also concluded their tightening cycles. What was notable last week was the continued strength in the Euro versus the US Dollar although traders now expect the ECB’s next move will be lower, which may slow or halt the US Dollar’s depreciation into the New Year.

As previously mentioned, Sterling was riding high last week on the back of a further jump in Gilt (UK sovereign debt) yields as GfK Consumer sentiment came in stronger than expected. Sterling hit a two-week high versus the Euro and 12-week high versus the US Dollar.


Gold +21 +1.06%

UK OIL -0.24 -0.30%

US OIL -0.74 -0.97%


Oil fell last week as traders reacted to the news that OPEC+ would delay their monthly meeting from last week, to this week. The meeting was supposed to have taken place on Sunday but is now scheduled for this Thursday 30th November. It is believed that OPEC+ group is struggling to get a consensus on the extension to the cuts already in place. The price of Crude Oil, initially spiking on the Hamas / Israel war which started on 7th October, has now fallen back to the $80 level; some $12 lower than its peak following the start of the conflict.

Gold continues to track the US Dollar and has virtually no correlation to inflation in the western world. If anything, it has become negatively correlated as a fall in inflationary pressure has led to a sell-off in the US Dollar, which is the main driver.

What don’t we know….yet?

(What traders need to look out for in the week ahead)

Reserve Bank of New Zealand is the only major Central Bank with a policy meeting this week. In the US, retail data over the Black Friday will dominate retail sector. Mid-week we have the flash CPI inflation data from the Eurozone which may provide further cheer for consumers in the run-up to Christmas. The delayed OPEC+ meeting will take place amid rumours of disagreement, whilst COP28 takes place in the UAE. It’s not clear at which gathering oil deals will be struck.



Eurozone ECB Chair Lagarde testifying before the Committee on Economic and Monetary Affairs of the European Parliament. Hints about likely path of rates would cause reaction. Euro and Euro assets sensitive.

US & everywhere Cyber Monday. Another “special” day as online retailers find ways of prising more money from the consumer.



UK BoE MPC member Haskel speaking about UK inflation at Warwick University. GBP sensitive to any clues re rates.

US Conference Board Consumer Confidence. Despite the record number of people shopping over the past weekend, this reading suggests consumers will be looking for bargains as confidence is expected to fall from last months reading.

US Richmond Manufacturing Index. The fifth Federal District of the US includes many of the Southern States. Hovering around zero – slight pullback to 1.

US FOMC Waller speaking at a discussion about the economic outlook and monetary policy at the American Enterprise Institute, in Washington DC. Could be very interesting as it concludes with a Q&A session.



Australia CPI inflation data. Stickier than hoped for. Inflation expected to fall back to 5.2% y/y. AUD sensitive.

New Zealand RBNZ rate decision. The only major central bank policy meeting this week. No change expected which will be the fourth month of unchanged rates. NZD sensitive.

US Prelim GDP reading for Q3. In fact, this is the second reading, following the advanced reading. A slight upward adjustment to what was a strong quarter. Backward looking.



China Manufacturing and Services PMI data. A gradual pick-up in both sectors but far from where the Beijing authorities planned to be.

Eurozone Flash CPI estimates. Headline expected fall again to 2.7% whilst the more problematic Core reading is expected to fall to 3.9% from 4.2% last month. Euro and Euro assets sensitive to this release.

OPEC+ The oil cartel delayed its meeting from Sunday amid rumours of a level of disagreement. With weakening global growth prospects, OPEC+ are looking for consensus amongst its members to cut production again to shore up prices. UKOIL and USOIL very sensitive to the announcement and any rumours swirling around beforehand.

US PCE (Personal Consumption Expenditure). The Federal Reserve’s preferred measure of inflation. Expected to fall to +0.2% as consumers reined in spending at the start of Q3. The key PCE Inflation element is expected to show price inflation moderating from 3.7% to 3.5%. USD and US assets sensitive to this release.



US Manufacturing PMI. A pick-up from last month’s horrid number expected in the manufacturing sector, which continues to struggle.

US Jay Powell, chair of the Federal Reserve, participating in a discussion titled "Navigating Pathways to Economic Mobility" in Atlanta. Anything Powell says re rates will be jumped on.


What should we be trading?

(Analysis of the popular markets and what we like)

What’s the problem?

(Examining a problem many traders face and what to do about it)