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59th U.S Presidential Election on Tuesday

USD

Undoubtedly, the U.S presidential elections will take center stage this week, but will face competition from some key economic data releases which will provide insights into how the global economy is reacting amid new records in Covid-19 cases across the globe. The Federal Open Market Committee concludes its next policy meeting on 5th November, just two days after the election, but it is expected that the Fed maintains its current stance, but it stands ready to adjust its monetary policy as needed. Key figures coming up:

  • On Monday (11/02): IHS Markit Manufacturing Purchasing Managers' Index (PMI) | Core Personal Consumption Expenditure (PCE) Price Index | Institute of Supply Management (ISM) Manufacturing Employment (Oct) | ISM Manufacturing PMI (Oct)
  • On Tuesday (11/03): ISM Non-Manufacturing PMI | Factory Orders (Sep)
  • On Wednesday (11/04): IHS Markit US Services PMI
  • On Thursday (11/05): Fed Interest Rate Decision
  • On Friday (11/06): Nonfarm Payrolls (Oct) | Unemployment Rate (Oct)

EUR

The widespread lockdowns in Europe has once again taken a firm grip on financial markets and dimmed the prospect for an economic recovery in the coming months. In the past week, the European majors stock markets traded consecutive days in red territory and a stronger USD put downside pressure on the EUR after the European Central Bank promised to deliver a package of measures in December, fueling rate cut expectations. Final PMI data for the Eurozone will therefore be eagerly awaited, providing more detail on national and sector trends. Key figures coming up:

  • On Monday (11/02): IHS Markit Eurozone Manufacturing PMI | IHS Markit France Manufacturing PMI | IHS Markit / BME Germany Manufacturing PMI
  • On Wednesday (11/04): IHS Markit Eurozone Composite PMI | IHS Markit Germany Services PMI
  • On Thursday (11/05): Eurozone Retail Sales (Sep) | German Factory Orders (Sep)
  • On Friday (11/06): German Industrial Production (Sep)

GBP

Similar to Eurozone, new records in Covid-19 cases across the UK were registered and new lockdowns were imposed in the past week, depressing the prospect for recovery in the coming months. The Bank of England’s (BoE) monetary policy meeting on Thursday will draw the market’s attention. Also, updated PMI numbers dominate the agenda, with October’s PMI updates at the detailed national and sector levels providing an opportunity to examine the underlying performance of the UK. Key figures coming up:

  • On Monday (11/02): IHS Markit / Chartered Institute of Procurement & Supply (CIPS) UK Manufacturing PMI
  • On Wednesday (11/04): IHS Markit / CIPS UK Services PMI
  • On Thursday (11/05): BoE Interest Rate Decision (Nov)

JPY

The JPY traded almost unchanged last week after the Bank of Japan not only maintained its monetary policy but also downgraded its economic and price forecasts for the current fiscal year. In the upcoming week, the focus will be on Friday’s data, where the largest automobile manufacturer in Japan, Toyota Motor, will release earnings for the first half through September. As the Covid-19 hit auto demand, Toyota's net profit fell 74.3% from a year earlier to ¥158.84 billion in the first quarter through June. Meanwhile, Household Spending in September also will be released, where market participants are expecting declines. Key figures coming up:

  • On Monday (11/02): au Jibun Bank Japan Manufacturing PMI
  • On Tuesday (11/03): Holiday - Culture Day
  • On Thursday (11/05): au Jibun Bank Japan Services PMI | Household Spending (Sep)

CAD

Canada will update both the Markit manufacturing PMI for October (Monday) and the Ivey PMI for the same month (Friday). They have both been indicating moderate growth. A wider trade deficit on Wednesday is unlikely to be a market mover. Central bankers will use speaking opportunities to reinforce their commitment to ongoing stimulus. Moreover, the Labor Force Survey on Friday will also grab investor’s attention, with the labor market likely to have continued to recover early in October, only to deteriorate under the weight of rising Covid-19 infections and renewed restrictions thereafter. Key figures coming up:

  • On Monday (11/02): RBC Manufacturing PMI (Oct)      
  • On Wednesday (11/04): Imports and Exports (Sep) | Trade Balance (Oct)
  • On Friday (11/06): Employment Change and Unemployment Rate (Oct) | Ivey PMI (Oct)

MXN

Past week National Institute of Statistics and Geography (INEGI, in Spanish) data showed that Mexican economic activity regained ground in Q3‘20 (12.0% quarter on quarter, 57.4% at an annualized rate) after the reopening of activities that began in early June. With the positive momentum in Q3, the industry reaches 90.4% of its pre-Covid-19 level, while the services sector 91.1%. However, the economic activity might lose dynamism in Q4 ‘20 once the initial impulse from increased mobility fades. It will be a relatively quiet week, with market participants watching the IHS Manufacturing PMI on Tuesday and CPI on Friday. Furthermore, risks stemming mainly from futures oil prices, as demand is likely to shrink again. Key figures coming up: 

  • On Tuesday (11/03): IHS Markit Manufacturing PMI
  • On Friday (11/06): Consumer Confidence Index (CPI) | Gross Fixed Investments (Aug)

CNY

Activity in China’s service and factory sectors expanded at a slightly slower pace in October, official data showed on Saturday, as demand across the economy continues to recover from a Covid-19-induced slump. The official October composite PMI, which includes both manufacturing and services activity, rose to 55.3 from September’s 55.1. However, which path will China follow? There is a modest downside risk particularly in the coming months as renewed challenges face the Eurozone economy, a key export market, as well as a stronger CNY, which could negatively impact the competitiveness of Chinese products. Key figures coming up:

  • On Monday (11/02): Caixin General Manufacturing PMI
  • On Wednesday (11/04): Caixin General Services PMI
  • On Saturday (11/07): Exports and Imports (Oct) | Trade Balance (USD) (Oct)

BRL

The BRL is still one of the worst-performing currencies in the world. Last week, the Brazilian real slid by almost 3% against the USD. Although the Brazilian economy maintains an upward momentum due to China’s rapid economic recovery, the Real is still subject to further depreciation on the back of the lack of progress of the reform bill agenda and domestic conflicts between political leaders. Key figures coming up: 

  • On Tuesday (11/03): IHS Markit Manufacturing PMI
  • On Wednesday (11/04): IPC-Fipe Inflation Index (Oct) | Industrial Production (Sep) | Industrial Production (Sep)
  • On Thursday (11/05): IHS Markit Brazil Services PMI | IHS Markit Brazil Composite PMI

 

Quick Insights

USD: U.S presidential elections will take center stage this week

USD: U.S presidential elections will take center stage this week

EUR: Final PMI data for the Eurozone will therefore be eagerly awaited

EUR: Final PMI data for the Eurozone will therefore be eagerly awaited

GBP: The Bank of England’s monetary policy will be the key event

GBP: The Bank of England’s monetary policy will be the key event

JPY: Toyota Motor earnings and Household Spending

JPY: Toyota Motor earnings and Household Spending

CAD: Labor Force Survey on Friday will also grab investor’s attention

CAD: Labor Force Survey on Friday will also grab investor’s attention

MXN: Economic activity might lose dynamism in Q4 ‘20

MXN: Economic activity might lose dynamism in Q4 ‘20

CNY: Activity in China’s service and factory sectors expanded

CNY: Activity in China’s service and factory sectors expanded

BRL: The Real is still subject to further depreciation

BRL: The Real is still subject to further depreciation

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