Flash Eurozone inflation figures are expected to confirm that the European Central Bank will cut rates again at its December meeting. Elsewhere, US GDP figures for the third quarter will be released along with minutes from the last Federal Reserve meeting. The Reserve Bank of New Zealand is expected to cut rates this week.
Here are the week’s key events:
Germany’s economy is in the doldrums, that is for sure. But could sentiment be finding a way to improve? The latest German Ifo business climate survey for November will tell us whether things are picking up in Europe’s largest economy. October’s survey showed sentiment improved after declining for four straight months. Earnings season is winding down on Wall Street, but Zoom Video Communications (ZM) is reporting. Three months ago, Zoom shares had their best day in two years after the company reported better-than-expected results for the second quarter and lifted their full-year guidance.
Crowdstrike Holdings (CRWD) will provide its latest earnings update to the market, with investors keen to see how it’s recovering in the wake of the faulty software update in July that hit global tech systems worldwide. Despite the hit to the shares at the time, CRWD has rallied since and is up around 40% or so year-to-date. In August, the company reported a 32% rise in total revenues, with subscription revenues up 33%, but it slashed its full-year earnings guidance by $86m to $109m. Elsewhere, look out for the Bank of Japan core CPI reading, plus some new home sales and pricing data from the US. The Richmond Fed manufacturing index and Conference Board consumer confidence reports are also due.
The Reserve Bank (RBNZ) is expected to cut its official cash rate by 50 basis points to 4.25% as it shifts towards a more neutral monetary policy. Westpac, a bank, says its baseline scenario predicts that the OCR will reach approximately 3.5% by the end of 2025. In addition to the cut, the RBNZ should likely flag further cuts in 2025. Elsewhere, Australian CPI inflation numbers are due out, which will guide expectations for its central bank. Preliminary Q3 GDP data from the US is printed later in the session, along with the Core PCE Price Index, durable goods orders, and weekly unemployment claims data. Lastly, FOMC meeting minutes are due for publication.
Inflation data is the focus towards the end of the week. First up we have Germany’s preliminary CPI readings, which will be watched closely ahead of the Eurozone data due on Friday. Spanish CPI numbers are also due. Later, market attention turns to Tokyo core CPI data, which will be important for yen crosses as the Bank of Japan mulls another rate hike. The chances are the BoJ is going to hike as the risk of waiting any longer may be too high for the yen. “If the BOJ takes a wait-and-see approach in December, it will likely increase downward pressure on the yen,” Masamichi Adachi, chief economist for Japan at UBS Securities Japan, wrote on Monday.
The week finishes with the November flash CPI inflation data for the Eurozone. Inflation has started to tick up a bit in the bloc, but so far, it’s not enough to dissuade the European Central Bank from cutting rates amid a rather lacklustre economic backdrop and outlook, with looming tariffs a key concern. Minutes from the ECB’s October meeting show that even before Trump won the election, growth concerns had taken over. However, some members are worried that the disinflationary trend may be over. If inflation moves up further, it could start to see more policymakers worry that they could run the risk of cutting too quickly. Canada GDP data and the Chicago PMI are also due. China’s manufacturing and non-manufacturing PMIs are due on Saturday with a slated OPEC meeting on Sunday.
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