Weekly Outlook: Global PMI Data to Guide Markets

Fundamental Data

U.S. stock markets have struggled to maintain their recent uptrend, suggesting a potential downturn. This week, PMI figures from the Eurozone are anticipated to provide further insights into the general economy. These figures continue to lag behind those from the U.S., highlighting ongoing structural challenges. In the U.S., President Trump is moving forward with appointing personnel for his administration. However, markets appear hesitant to fully embrace the new presidency. Concerns over increased spending may be limiting upside momentum in equities for now. Bond markets have been reactive for potential moves as yields have been rising already. Renewed questions in regards to the rise of the debt ceiling might follow soon.

Important Events This Week

– Canada’s Consumer Price Index (CPI) – On Tuesday, November 19, at 14:30 CET, Canada will release its October CPI data. Inflation trends from this report could provide insights into the Canadian economy’s direction. A rise in inflation might strengthen the Canadian Dollar (CAD), which has recently weakened against other currencies.

The USDCAD pair has broken out of its long-term trend, indicating potential for further upward movement. The recent weakness of the Loonie has contributed to this trend. Traders should monitor the CPI release, as it could influence the pair’s trajectory.

The USDCAD pair has broken through the 1.3950 resistance level, triggering upward momentum that could extend toward the 1.4200 zone. A potential retracement to the breakout area may present new buying opportunities.

– UK Consumer Price Index (CPI) – The UK’s CPI data is scheduled for release on Wednesday, November 20, at 08:00 CET. Expectations are for a year-over-year increase to 2.2%. A stronger-than-expected reading could bolster the British Pound (GBP), enhancing its momentum.

In general, the current trend for the British Pound (GBP) is negative against most other currencies. Against the U.S. Dollar (USD), the GBP is currently hovering above a slight support zone. If this area holds, the market could rise, as indicated by the arrows above. However, a break below the 1.2615 level could trigger a shift in sentiment, with bearish momentum likely taking control.

– U.S. Unemployment Claims – the U.S. unemployment claims data will be released on Thursday, November 21, at 14:30 CET. Last week, the figures were slightly better than expected, which helped the Dollar gain momentum. If claims remain solid this week, the Federal Reserve may not be in a rush to cut interest rates during their December meeting. Currently, there is a 66% chance of a 25-basis point rate cut at that time.

A look at the S&P 500 index shows that the market has struggled to rise further this week. Following Donald Trump’s election as the new President of the U.S., markets saw an initial rally. However, it now appears that the market is reaching a point of saturation. The upcoming figures may provide further insights into the current state of the U.S. economy.