This Week: SPX500_m traders await US CPI reading

This benchmark US stock index pulled back slightly after the “everything rally” earlier last week, as markets hope for sooner-than-expected Fed rate cuts in 2024.

This week’s events may determine whether SPX500_m stays above or below its 50-day simple moving average (SMA) over the near-term.

Markets are set to remain focused on how the incoming US economic data may influence the Fed‘s rates outlook, with the upcoming US inflation data release taking centre stage.

The déjà vu of yet another US government shutdown looming large should merely add to the market noise.

Events Watchlist:
 

• Tuesday, November 14: US October consumer price index (CPI)

Markets are eager to find out if US inflation is firmly on the downtrend, or risks seeing a resurgence that policymakers fear.

A headline year-on-year CPI number that’s much higher than the forecasted 3.3% may push back expectations for 2024 Fed rate cuts, perhaps prompting the SPX500_m to unwind more of its recent gains.

• Wednesday, November 15: US October retail sales

US retail sales are expected to have shrunken by 0.3% last month, showcasing the impact from the Fed’s aggressive rate hikes.

In the current “bad news is good news” environment, an even-steeper decline may bolster bets for Fed rate cuts next year, which could spark further joy among equity bulls to send the SPX500_m higher.

• Friday, November 17: US government shutdown?

Here we go again.

US lawmakers are facing a midnight deadline to avoid a government shutdown starting at midnight November 18th.

If Republicans and Democrats bring discussions down to the wire once more, that may add to market jitters, or cap the risk-on exuberance, depending on the broader narrative surrounding Fed rates.

Here’s comprehensive list of other key economic data and events due this week:

Monday, November 13

• JPY: Japan October PPI
• GBP: Speech by BOE’s Catherine Mann

Tuesday, November 14

• AUD: Australia November consumer confidence
• EUR: Eurozone 3Q GDP and unemployment release; Germany November ZEW survey expectations
• GBP: UK October jobless claims; speech by BOE chief economist Huw Pill
• USD: US October CPI; speeches by Fed Vice Chair Philip Jefferson and Chicago Fed President Austan Goolsbee

Wednesday, November 15

• JPY: Japan 3Q GDP; September industrial production (final)
• CNH: China October industrial production, retail sales, and jobless rate
• GBP: UK October CPI
• USD: US October retail sales
• Crude: EIA weekly inventories data resumes

Thursday, November 16

• JPY: Japan October external trade
• AUD: Australia November consumer inflation expectations; October unemployment
• USD: US weekly initial jobless claims; October industrial production
• USD: Speeches by Cleveland Fed President Loretta Mester, New York Fed President John Williams, Fed vice chair for supervision Michael Barr
• WSt30: Walmart earnings

Friday, November 17

• GBP: UK October retail sales
• USDInd: Speeches by Chicago Fed President Austan Goolsbee, Boston Fed President Susan Collins, San Francisco Fed President Mary Daly
• SPX500_m: US government shutdown deadline