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Macroeconomic & Geopolitical

Signed, Sealed, Delivered

16 January 2020 - 3 min read

A U.S.-China 'Phase One' trade deal is in the books, while December U.S. retail sales confirm a good holiday shopping season. All eyes will now be set on next week's Markit PMI releases to gauge whether easing tensions are beginning to be a boon to sentiment.

Watch List

U.S.

  • U.S. manufacturing is in for a bumpy ride, but recovery is on the horizon. The preliminary January Markit manufacturing PMI is set to edge slightly higher into expansionary territory thanks to easing trade tensions and a relatively weaker U.S. dollar.
  • The U.S. housing market is expected to continue its strong performance. Lower mortgage rates, easier financial conditions, and a solid labor market are pushing up demand for housing. Sentiment remains near an all-time high, though limited supply will continue pushing home prices higher.

Europe

  • Despite weak inflation data, the ECB is set to keep its policy rate steady next week. We look for whether the ECB president will express comfort with the strength of the euro area recovery in her press conference following the meeting.
  • Manufacturing PMI data should post modest increases, though will likely remain in contractionary territory as trade and policy uncertainties subside.

Asia Pacific

  • Despite subdued inflation and macroeconomic headwinds, the Bank of Japan is expected to keep its policy rate steady.
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