Whether December’s Bank of England meeting will be a “live” one may be determined by British data, especially on jobs. Finally, Turkey, defying near-20% inflation, seems set to cut interest rates again.
1. HOUSING COSTS
Eleventh hour payments of overdue interest are helping China Evergrande squeak clear of default; the latest one has momentarily staunched bleeding in credit markets.
It is cold comfort as investors count the cost of a crippled property sector on China’s economy. Demand worries have pounded iron ore prices but despite signs of economic slowdown, the hoped-for policy easing is yet to meaningfully arrive.
Home price data on Monday may show values stalled or even slowed last month. And the outlook isn’t bright, if desperate developers flood the market with discounted stock.
It bodes ill for a sector comprising a quarter of the world’s No 2 economy. It’s also a bad omen for consumption, seen slowing down in figures due Monday.
2. TWITTER FUN
Tesla shares, whipsawed after co-founder Elon Musk asked Twitter users whether he should sell a 10% stake in the electric car firm, are in focus.
Nearly 58% of respondents to the poll backed a sale of the shares and according to stock market filings, Musk has sold about $5 billion of shares over recent days.
Tesla had an eye-watering run in October, its market value past $1 trillion. It accounts for about 2.1% of the S&P 500’s roughly $4 trillion market cap versus 1.8% when Tesla joined the index almost a year ago.
Markets are also watching for news on whether Jerome Powell will be renominated as Federal Reserve chief. Powell and Fed Governor Lael Brainard, a possible successor, were recently spotted at the White House.
3. DATA DEPENDENT
After stunning markets on Nov. 4 by not delivering a widely anticipated rate rise, the Bank of England said it wanted more evidence of labour market improvement. Two sets of data are due before its next meeting, the first on Tuesday.
Following good numbers for September, October jobs data will show if unemployment rose after the Sept. 30 expiry of a pandemic-time wage subsidy scheme that one million people were estimated to be on.
Inflation and retail sales data are out Wednesday and Friday respectively. A big inflation print alongside another retail sales decline will force the BoE to choose whether to act against inflation or nurture the fragile economy.
With an economy 0.6% smaller below pre-pandemic levels and risks growing of a damaging confrontation with the EU, a rate rise is the last thing Britain needs. But 4%-plus inflation may leave the BoE no option.
4. TURKEY AND THE CUTS
Turkey’s central bank meets on Thursday. Although its currency has stumbled from record low to record low and inflation stands at around 20%, policymakers are…
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