WASHINGTON – As the week of November 20th approaches, US financial markets are poised for a period of stability with expectations leaning towards a shift from the Federal Reserve’s rate hikes to possible aggressive cuts starting by May 2023. Investors are closely monitoring several key economic indicators, including housing data impacted by mortgage rates that have soared to 8%, durable goods orders susceptible to volatility from Boeing (NYSE:)’s order book, and jobless claims figures. Despite these factors, the upcoming release of the Federal Open Market Committee (FOMC) meeting minutes from November 1 is not anticipated to significantly sway the market.
In Europe, attention is turning towards consumer confidence data in the Eurozone. While a consumption-led rebound is forecast for 2024, bolstered by real wage growth, current indicators such as weak Purchasing Managers’ Index (PMI) figures in November suggest that an early start to the recovery may be unlikely.
Across the English Channel, the UK is preparing for Chancellor Jeremy Hunt’s Autumn Statement on Tuesday. Hunt is expected to capitalize on a £20 billion lower borrowing than forecasted for this fiscal year and increased financial flexibility indicated by projections from the Office for Budget Responsibility (OBR). His presentation will likely focus on maintaining his primary fiscal objective of reducing debt as a percentage of GDP within five years, with support from high inflation-linked revenues.
Meanwhile, in Sweden, the Riksbank faces uncertainty regarding its decision on interest rate hikes. Cooling job markets and persistently high services inflation are at play, alongside concerns about currency weakness as evidenced by the Riksbank’s foreign exchange selling and trends in the trading of the Swedish krona (SEK). Additionally, vulnerabilities in the housing market are expected to influence the central bank’s considerations on rate adjustments.
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