Short week with Thanksgiving Day!
In the short week ahead, we will have more volatile and risky days with the lack of liquidity, FOMC meeting minutes, and Bond yields changes, while still, we have another round of speeches and many other economic data, including PMI and retail sales numbers from most developed economies and Chinese central bank's interest rate decision. Let's check the most important events of the week, reminding, that Thursday and Friday are the thanksgiving holidays in the United States.
PBOC Interest Rate Decision – Monday
The People’s Bank of China increased short-term liquidity by cutting the reserve requirement ratio but no change in its interest rate to hold the loan prime rate steady, which means that the Chinese central bank still trying to continue its supports with dovish policies, especially now that the property sector is in a higher risky situation. In this meeting, investors expect PBOC to keep its benchmark lending rate steady at the current 3.85% level. This policy will put more pressure on the Chinese Yuan.
US Existing & New Home Sales, Monday & Wednesday
The housing market still is one of the most active markets with increasing Existing and new home sales in September with 7% and 14% respectively. For October, the recently increased mortgage rates, increasing energy prices, ongoing supply logjams, and labor shortages can be the reasons to expect some weakness in numbers, which is the market expectations as well for both new, and existing home sales. While we are waiting to see some weakness in the stock markets, these numbers also can increase this expectation and pressure on the stock markets.
Eurozone PMIs, Tuesday
Tuesday will be Public Holiday in China, but Eurozone and the US market will focus on the Purchasing Managers Index data. With the latest COVID-19 waves in Europe and worries in the US, again we are not that much optimist for PMI numbers, especially for consumer and service sectors. If we see the weaker numbers, it will prompt the European Central Bank to hold its currently ultra-dovish policies and not to start tapering in its overall bond purchases plan, at its December monetary policy meeting. This weakness, supposed to hold the pressure on Euro against its crosses.
RBNZ Monetary Policy Meeting, Wednesday
The Reserve Bank of New Zealand (RBNZ) announces its monetary policy decision on Wednesday. At the current developing economic conditions in New Zealand, we are waiting to see 25 bps rate hikes to 0.75%, as the country's inflation raised by 4.9% in the third quarter. However, same as the September meeting, we may have last-minute changing decisions, because of some cautionary notes regarding the near-term economic outlook, and jobs reports that showed a large drop in hours worked during Q3. Expected policy, can put the Kiwi in a stronger position against its crosses.
Thanksgiving Day holiday - Thursday and Friday
Thursday and Friday will be holidays in the US because of Christian Thanksgiving day, so it will be a short week, while many investors and traders also will be out of the market on the first days of the week, because they prefer to rest and enjoy long holidays, out of market stress. So, with fewer traders, we will have a lack of liquidity, and usually, it is increasing the market risk and sharp movements, therefore please be careful about your trades and positions.
