Black Friday, OECD, Fed Minutes: 5 Things to Watch This Week By Investing.com


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By Noreen Burke

Investing.com – The minutes of the Federal Reserve’s meeting on Wednesday will be the highlight of a shorter-than-usual week due to the Thanksgiving holiday, with investors watching for any sign of that the rate of rate hikes can slow down.

The biggest shopping period of the year begins Friday in what will be a key test for US retailers. The latest OECD Global Economic Forecasts, due to be released on Tuesday, along with data from the Consumer Price Indices (PMI), will provide an important insight into the health of the global economy.0

Meanwhile, China could step up economic support measures and there are signs that the dollar may be about to be dethroned.

This is what you need to know to start the week.

1. Fed Minutes

The Fed is set to release its November meeting on Wednesday, and investors are eager for any sign that policymakers might be considering slowing down the tightening process after raising rates more quickly this year than at any time. since the 1980s.

Fed Chairman Jerome Powell and other policymakers have signaled that the central bank may change tack by next month to avoid tightening more than necessary and sending the economy straight into recession.

At the same time, Powell has said that it may ultimately be necessary to raise rates above 4.6%, something that policymakers thought in September would be necessary for next year.

This week’s economic agenda also includes the , the , the October readings and the November reading.

2. Black Friday

Against a backdrop of rising inflation and rising interest rates, a key test of consumer demand comes on November 25, when retailers release their sales data for “Black Friday,” traditionally one of the busiest shopping days. strong of the year

The latest data shows that US retail sales rose more than expected in October, indicating that consumers could be on a stronger footing heading into the end of the year. Consumer spending accounts for more than two-thirds of economic activity in the United States.

Retailers posted mixed reports in the latest earnings season. Last week, Walmart (NYSE:) raised its full-year sales and profit forecasts as demand for food was expected to hold up despite rising prices, while target (NYSE:) reported an unexpected drop in fourth-quarter sales after warning of “drastic changes” in consumer behavior that were weighing on demand.

Amazon (NASDAQ:), the world’s largest online retailer, said on Oct. 27 it was bracing for slower growth because “people’s budgets are very tight” due to inflation.

3. OECD forecasts/PMI data

The OECD will release its latest forecasts for the world economy on Tuesday, which together with preliminary readings of November business activity for several countries, will provide a snapshot of the global economic outlook.

The latest OECD forecasts, made in September, already pointed to a deterioration in the outlook for next year, given the forecasts that the US economy would enter a recession.

PMI data from the US and the US on Wednesday could exacerbate pessimism. In most European countries, PMIs are below the 50 mark that separates expansion from contraction.

The UK is already facing a long recession. Eurozone economic growth has held up better than expected and labor markets remain relatively strong. But recession risks still loom in the face of energy shortages and high inflation.

4. Has the dollar passed the peak?

The hit a 20-year high of 114.78 in September and has been falling ever since. With the coin on track for its biggest quarterly loss since the second quarter of 2017, investors are now wondering if it has passed the peak.

The rise of the dollar has been a recurring theme in the market in 2022, thanks to rapid rate hikes by the Fed, which has given the currency an advantage over its peers among investors.

But Goldman Sachs analysts said on Friday that there still appears to be “several quarters” to go before the dollar tops out, saying they don’t think the Fed will embark on easing until 2024. They add that US growth is not expected bottom out in the near future.

5.Chinese

The Chinese central bank’s pledge to step up policy support measures should be on display this Monday, when the main lending rates are set.

All indications are that the People’s Bank of China will hold main lending rates unchanged for the third month in a row, as policymakers are reluctant to lower the rate through further easing of monetary conditions.

The authorities are looking for ways to prop up economic growth without triggering financial instability.

Other regional central banks will also hold their monetary policy meetings during the week. The Reserve Bank of New Zealand is expected to raise rates by 75 basis points on Wednesday, while the Bank of Korea will further tighten monetary policy, though possibly only by a quarter of a point.

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