Key economic releases, week commencing November 16th, 2020

16 Nov, 2020 | Week Ahead | 0 comments

  • UK inflation should show deflation risk not a threat – yet
  • UK factory order data could deliver best print since February
  • US existing home sales may dip lower month on month but trend set to remain up

After a quiet start to the week, Tuesday is likely to see attention focusing on Eurozone Construction Output data for September. Having hit a low of -30.9% back in April, the picture has been improving steadily since, but expectations are that sentiment will have soured once again. With the second wave of COVID impacting business confidence this can be no surprise, but a reading of around -4% will do little to placate hopes that economic activity in the currency bloc in improving.

US Retail Sales for October are also slated for publication and October’s move out to +1.9% has the potential to look like something of an anomaly. That said, month-on-month growth of around 0.5% is forecast, although with COVID’s impact continuing to grow across the Atlantic, further weakness may emerge as the year end approaches.

Wednesday sees the publication of UK Inflation datafor October which is expected to show an annualised reading of around 0.9%. That’s not great, but at least keeps deflationary risks at bay. The bigger concern would be if the month-on-month rate dips into negative territory.

The CBI Industrial Trends Order for November will be published on Thursday, giving some insight as to the health of factory order books. A print of -26 is being called, which whilst still suggesting that trading conditions are tough, would be the highest reading since February. Whilst fresh COVID disruption could be seen, by now this number ought to be taking account of any Brexit fallout. So long as the upward trajectory can be maintained here, confidence may be unaffected.

Another glimpse at the state of the US economy will be offered also on Thursday, with the release of US Existing Home Sales for October. This is set to show a month on month decline, but the September figure was significantly higher than had been seen recently and even a modest reversion wouldn’t be sufficient to risk the trajectory losing momentum. With interest rates showing no sign of moving higher, there’s little reason to believe this market will stall any time soon.

GfK Consumer Confidence for November will be published on Friday. The number moved sharply lower off the back of the first lockdown and arguably hasn’t recovered since. After October’s -31, this month’s reading is expected to come in around the -27 mark but that’s hardly cause for cheer.

Rounding off the week is UK Retail Sales for October which appears set to show a degree of belt tightening amongst consumers. The figure has been positive for the last five months, but could slip back into negative territory here. This, combined with a disappointing consumer confidence print, may be sufficient to see sentient checked ahead of the weekend break. 

Article by Tony Cross of Monk Communications. This article first appeared in Octo
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