Key events to watch in the week ahead: 20 – 26 November 2023
What are some of the key events to watch next week?
This week’s overview
The S&P 500 looks set to round up its third straight week of gains, as extreme bearish bets continue to unwind on dovish recalibration of Federal Reserve (Fed) rate expectations. Currently, the index stands just 2.3% away from its year-to-date high, as we continue to tread in the seasonally stronger period of the year.
Dips in US Treasury yields continue to keep the US dollar in its weak state, while gold prices attempted to recover, seemingly setting its sight for another retest of the key psychological US$2,000 level. On the other hand, rising economic risks have not been well-received by Brent crude prices lately, which fell to its lowest level since July this year, while a break below its 200-day moving average (MA) provides testament to sellers in control.
Heading into the new week, here are five things to note.
21 November 2023 (Tuesday, 8.30am SGT): Reserve Bank of Australia (RBA) meeting minutes
At its November meeting, the RBA raised its official cash rate by 25 basis point (bp) to 4.35%, in a widely-expected move which marked the central bank’s first rate increase since June 2023.
The catalyst for the rate hike was an upgrade in the RBA’s inflation forecasts to 3.5% from 3.3% by the end of 2024, and for inflation to be at the top end of the target range of 2-3% by the end of 2025.
“The Board judged an increase in interest rates was warranted today to be more assured that inflation would return to target in a reasonable timeframe.”
Nevertheless, markets perceived the decision to be a dovish hike, given that the RBA’s tightening bias was watered down. The upcoming minutes are expected to reiterate the sentiments outlined above. They will be closely scrutinised around what options the Board considered, the factors that would prompt the RBA to act on its tightening bias and what factors might see the RBA move back to the sidelines.
22 November 2023 (Wednesday, 3am SGT): Federal Open Market Committee (FOMC) meeting minutes
As widely expected, the Fed maintained its target rate for the Fed Funds at 5.25%-5.50% at its November meeting.
While the FOMC statement was most unchanged, and the Fed left the door open for rate hikes, the Fed noted that tighter financial conditions were likely to weigh on activity. It noted that the risks of doing too much versus too little on inflation was “more balanced.”
The statement raised hopes that the Feds rate hiking cycle is over. The minutes will likely reiterate the Fed's more cautious tone while noting that rates are expected to stay higher for longer.
23 November 2023 (Thursday, 1pm SGT): Singapore’s consumer price index (CPI)
Singapore’s core inflation rate has moderated from its peak of 5.5% year-on-year at the start of the year to the current 3.0% as of September 2023, which reflect some success in tighter monetary policies working their way through economic conditions. Headline pricing pressures have also softened from its peak of 6.7% in October 2022 to the current 4.1%.
The Monetary Authority of Singapore (MAS) is expected to extend its tightening pause into 2024, in line with the wait-and-see stance among global central banks. The central bank’s monetary policy statement in October projects Singapore’s core inflation to step down further to between 2.5–3.0% year-on-year by December this year, while headline inflation may see a slight pick-up into year-end.
24 November 2023 (Friday, 7.30am SGT): Japan’s inflation rate
Recently, the Bank of Japan (BoJ) Governor Kazuo Ueda acknowledged that Japan was making progress towards sustainably achieving the central bank's 2% inflation target, which is one of the central banks’ pre-conditions to scrapping its yield curve control (YCC) and negative interest rate policy. However, he stopped short of providing a timeline and guided that there are "still some distance to cover".
Thus far, Japan’s headline inflation rate has moderated from its peak of 4.3% in February 2023 to 3.0% in September 2023, but the core-core aspect (excluding food and energy prices) remains persistent around its multi-year high at 4.2%. Ahead, expectations are for October headline inflation to tick higher to 3.4% year-on-year from previous 3%, while the core-core aspect is expected to moderate to 4.0% from previous 4.2%.
24 November 2023 (Friday, 7.30am SGT): US S&P Global flash purchasing managers’ index (PMI)
After five straight months of contraction, the US S&P Global manufacturing PMI has reverted back to the 50 level in October, while the services PMI also saw an uptick to 50.6 from previous 50.1.
Rate expectations are firm that US interest rates have peaked, but the timeline for Fed’s rate cuts remains wavered. Currently, markets are pricing for the first rate cut from the Fed in May 2024 and 100 bp worth of cuts in 2024, with any softer PMI read likely to provide some validation for dovish expectations.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets