Equity, currency and bond markets continue to be at the mercy of US politics and what investors think will be the effect of a Trump presidency, but this week the stage is shared with the UK’s political scene.

All eyes are on UK chancellor Philip Hammond on Wednesday as he prepares for his first major set-piece event - the annual Autumn Statement. This will be the first real policy response from the Treasury since the Brexit vote and market participants will carefully pick over the details of the speech.

Will he usher in a new post-austerity era? Unlikely, but the chancellor seems keen to deliver some sweeteners post Brexit to counter what Bank of England governor Mark Carney calls a “slow motion slowdown” in the economy. To that end we might expect some loosening of the fiscal rules and new infrastructure spending to ‘future proof’ the UK economy against the worst of Brexit.

Mr Hammond’s hands are not that free. Growth has so far held up pretty well since June but this is not expected to last as the Brexit process progresses and rising inflation crimps consumer spending. The Institute for Fiscal Studies recently warned that the chancellor is facing a £25bn black hole in the public finances.

Trump-esque levels of fiscal stimulus are unlikely but we will almost certainly see a shift towards more spending (perhaps using mooted infrastructure bonds), a more flexible fiscal framework and greater emphasis on structural reforms designed to boost lacklustre productivity.

Elsewhere, Australia’s mid-year economic and fiscal outlook will be closely watched on Tuesday. Eurozone flash manufacturing and services PMIs are among the biggest economic data releases of the week. Eurozone manufacturing activity grew at the fastest rate in 3 years last month.

Also on Wednesday, minutes from the most recent FOMC meeting are due. With markets firmly expecting the Fed to hike rates next month, the minutes are anticipated to show that policymakers are ready to pull the trigger.

Expect liquidity to be a tad thinner towards week end as it’s the US Thanksgiving holiday on Thursday, while activity on the corporate earnings front is very limited.

Economic Calendar

(All times are GMT)

Tuesday, 22 November

00:30 – Australia mid-year economic and fiscal outlook

13:30 – Canada retail sales

15:00 – US existing home sales

Wednesday, 23 November

08:00 – Flash France composite services & manufacturing PMI

08:30 – Flash German composite services & manufacturing PMI

09:00 – Flash Eurozone composite services & manufacturing PMI

12:30 – UK Autumn Statement

13:30 – US core durable goods orders, weekly unemployment figures

14:45 – US flash manufacturing PMI

15:30 – US crude oil inventories

19:00 – FOMC meeting minutes

Thursday, 24 November

All day – US Thanksgiving holiday

12:30 – Japan flash manufacturing PMI

07:00 – German final GDP reading

09:00 – German Ifo business climate

21:45 – New Zealand trade balance

23:30 – Japan core CPI inflation

Friday, 25 November

07:00 – UK Nationwide house price index

09:30 – UK second estimate Q3 GDP

14:45 – US flash services PMI

Earnings Calendar


Tuesday, 22 November

Hewlett Packard Enterprise (HPE) – Q4/2016, EPS estimate 0.605

HP Inc (HPQ) – Q4/2016, EPS estimate 0.363

Wednesday, 23 November

Thomas Cook Group (TCG) – Y/2016, EPS estimate 0.087

Infineon Technologies (IFX) – Y/2016, EPS estimate 0.713

Thursday, 24 November

Thyssenkrupp (TKA) – Y/2016, EPS estimate 0.817

Source: Bloomberg

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