China’s Xi speaks with Trump by phone, discusses Taiwan and bilateral ties
Investing.com - A deluge of U.S. economic data is set to feature prominently in a trading week due to be interrupted by the Thanksgiving holiday. Measures of retail sales and producer prices are scheduled to be published, after these figures were delayed by a more than month-long federal government shutdown. Peace talks to end the war in Ukraine are also in focus, along with the upcoming release of the much-anticipated Autumn Budget in the United Kingdom.
1. Retail sales data
Investors will be keeping close tabs on the economic calendar this week, especially a fresh gauge of retail spending due out on Tuesday.
Consumer spending accounts for some two-thirds of the American economy, giving the figures additional importance during a month when the broader outlook has been clouded by a data blackout because of a recent federal government shutdown.
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The reading, which was delayed by the record-long 43-day government closure, is anticipated to show that U.S. retail sales grew by 0.4% month-over-month in September, compared to 0.6% in August.
Any signs of strength in the numbers, as well as in the upcoming Black Friday discounting spree which typically kicks off the key holiday shopping season, could help to alleviate some of the grim sentiment surrounding wider stock markets.
Despite solid earnings from artificial intelligence-darling Nvidia last week, fears around the sustainability of heavy expenditures on AI and infrastructure related to the technology have weighed on equities in recent weeks.
2. U.S. producer price index due
Elsewhere, traders will also finally get a look at the September U.S. producer price index from the Bureau of Labor Statistics.
Yet another vital data piece postponed by the government shutdown, the gauge of producer price growth is one of several tools which have been used to monitor how firms are reacting to pressures from sweeping U.S. tariff. Economists expect the measure to increase by 0.3% month-over-month.
The PPI’s August metric unexpectedly fell by 0.1%, suggesting that companies were grappling with squeezed trade services margins as they chose to absorb some of the costs related to the tariffs rather than pass them on to consumers.
But separate worries have swirled around whether the PPI measure for the month was indicative of a broader softening in domestic demand fueled by a weakening labor market.
3. Beige Book to be unveiled
Confronted with these concerns, the Federal Reserve chose to slash interest rates by 25 basis points at each of its meetings in September and October.
Yet another rate cut may be coming at the Fed’s final gathering of the year next month as well, CME’s FedWatch Tool showed, although policymakers appear to remain divided over the matter.
Due to the paucity of government data, analysts have suggested that the Fed’s "Beige Book" -- a compendium of survey results, interviews and other qualitative information from the central bank’s regional arms -- has become an alternative tool officials can use to calibrate borrowing costs.
In October, the Beige Book signaled that while U.S. economic activity has been broadly stable, there have been emerging warnings of potential softening, particularly in increased layoffs and a pullback in spending by lower- and middle-income households.
4. Trump’s Ukraine peace plan
Oil prices inched down on Monday, with analysts weighing both the outlook for Fed policy and the possibility of a U.S.-brokered Russia-Ukraine peace deal being reached.
By 03:09 ET, Brent crude futures had dipped by 0.4% to $61.70 a barrel, while West Texas Intermediate was mostly unchanged at $57.81 per barrel.
The United States and Ukraine were anticipated to carry on negotiations over a potential peace agreement which would bring a halt to the latter’s prolonged fighting with Russia. Both sides said on Sunday they would make changes to an initial proposal put forward by U.S. President Donald Trump, which critics have claimed was too favorable for Russia.
Trump previously urged Ukraine to sign on to the peace plan by Thanksgiving, but U.S. Secretary of State Marco Rubio later suggested the deadline was not unmovable.
"Developments related to a potential peace agreement are important for the oil market, particularly amid significant uncertainty about the impact of recently imposed sanctions on Russia’s Rosneft and Lukoil," analysts at ING said in a note.
"Clearly, a peace deal increases the likelihood that sanctions will be lifted, or at least not enforced strictly."
5. U.K. budget announcement
Beyond the U.S., investors in the United Kingdom are preparing for the unveiling of the Autumn Budget on Wednesday, with Finance Minister Rachel Reeves expected to have to raise taxation in order to balance the country’s budget.
Britain’s economy has been largely stuck in a rut of slow growth since the 2007-08 financial crisis, something Reeves and Prime Minister Keir Starmer vowed to end when the Labour Party returned to power last year after more than a decade in opposition.
However, Reeves looks set to raise taxes by tens of billions of pounds for the second time since the election to stay on track to meet her borrowing targets, hoping to avoid a bond market selloff while also increasing welfare spending.