The Week Ahead for Global Markets - Analyst Blog
This Week Ahead for Global Markets is a trading week dominated by a U.S. non-farm payroll number.
As long as the monthly U.S. non-farm payroll number gets back to around +200K -- as consensus expects -- bullish U.S. stock market assumptions won't be challenged.
A soft patch in the U.S. is a major concern.
On Friday, if share traders see another weak U.S. monthly non-farm jobs number, that could change sentiment on both U.S. and global fundamentals. Weak job additions could change the Fed view about rate hike plans in 2015.
On Monday, Chinese share investors took yet another weak Chinese PMI manufacturing reading in stride. Manufacturing weakness there was read as more 'bad' news that is 'good' news.
Chinese monetary authorities could order even more rate cuts. The Chinese government could stoke up more fiscal stimulus. That alludes to share index reflation ongoing in Mainland China.
All in all, global share markets are running scared, reeling away from the paltry rates available in global bond markets. Other than Brazil, with its 13.25% bond rates, which is also in recession (surprise, surprise).
As long as policy rate cuts and policy rate delays dominate the global consensus view, don't expect global share reflation bulls to pack it in.
Looking to the 12-month horizon, this is a bullish trending market. Looking at the here and now is a different question with a different answer.
Here is what is on tap for traders:
On Monday , the HSBC/Markit PMI for China manufacturing showed a 48.9 number, which is below the 50 mark signaling expansion, below the prior 49.2, and below the consensus call for 49.4.
In Australia, ANZ job additions went up +2.3% m/m, up from a prior -1.3% m/m.
In Spain, the manufacturing PMI came out at 54.2, versus a prior 54.3. In France, the manufacturing PMI was 48, versus a prior 48.4. In Germany, the manufacturing PMI was 52.1, versus a prior 51.9. In Greece, the manufacturing PMI was 46.5, versus a 48.9 prior.
All of the Eurozone PMI data came in weaker, with Greece leading the way down. That says that the Greek negotiations deadlock is having a material effect on the European expansion. The Eurozone Sentix Indicator came in a 19.6, below the 20 recorded in a prior reading.
In Brazil, the HSBC manufacturing PMI is forecast at 46.8. The HSBC manufacturing PMI for Mexico looks to be 53.8.
On Tuesday , The EU is going to publish its Spring Economic Forecasts. In addition, the EU's Wieser speaks at a conference in NYC.
The U.S. ISM non-manufacturing index hits. Consensus looks for a 56 reading, in line with the prior 56.5.
On Wednesday , the HSBC/Markit services PMI looks to be 52, in line with the 52.3 reading. Manufacturing in China is the sole concern there.
The Spanish services PMI looks to be 57.4; the Italian services PMI looks to be 52; the French services PMI looks to be 50.8; the German services PMI looks to be 54.4.
The Eurozone retail trade number is the next area of interest. Consensus looks for 2.4% y/y, versus 3.0% y/y.
In comparison, the HSBC Brazil composite looks to be 47.2, with services coming in at 47.5.
The U.S. APD employment survey comes out. Consensus looks for +200K. The Fed's Yellen and the IMF's Lagarde speak on a panel in Washington DC.
On Thursday , German factory orders come out. Consensus looks for 1.9% sa in y/y terms, versus -1.3% y/y prior. In contrast, French manufacturing production looks to be -0.3% y/y, versus a -0.8% y/y prior number.
Mexico reports its CPI. Consensus looks for a 3.08% y/y rate, versus a 3.14% rate.
On Friday , German industrial production looks to be +0.5% y/y, versus a -0.3% y/y rate prior.
The Greek inflation rate, the HICP, comes out. Look for a -1.7% y/y rate, versus a -1.9% rate prior.
In the U.S., non-farm payroll data hits. Look for a +225K number. The unemployment rate should be 5.4%, a slight improvement from 5.5% prior.
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