How much value can come out of talks, anyway? This weekend leaders of the Group of 20 are gathering in Brisbane, Australia to discuss proposals to promote growth among member states. With no actual power over policy, the impact of the organization’s proposals is always a matter of debate among investors. Coming on the heels of the surprise announcement of a surprise environmental agreement between the U.S. and China at the Asia-Pacific Cooperation Summit this past week, these global confabs seem unlikely to inspire more market confidence. Likewise, the meeting of Association of South East Asian Nations in Myanmar is expected by few to lead to little tangible change. The sensation that central bankers are still doing all the heavy lifting while elected officials wring their hands and bicker over structural reform remains as palpable today as since the global economy began its recovery from the 2008–’09 financial crisis. Ironically, the one government to accomplish a tangible economic achievement this year could be the U.S., despite the now-deeper partisan division between its legislative and executive branches. In a report released late last week Daniel Clifton, head of policy research for Strategas Research Partners in Washington, noted that a free-trade agreement under negotiation with President Barack Obama’s administration with Asian partners is likely to get Congressional endorsement. “Trade agreements are a policy priority for both President Obama and Senator [Mitch] McConnell now that the midterm elections are over,” he wrote. “We believe TPA/TPP (trade promotion authority/Trans-Pacific Partnership) gets done in 2015, which is bullish for U.S. energy and agriculture companies.”
Monday, November 17: The week kicks off with Japanese third-quarter gross domestic product numbers. Consensus forecasts show a rebound into positive territory, providing more support for Abenomics on top of the bullish production numbers released Thursday. Also on the schedule is aggregate euro zone September trade data, with expectations that the uptick in the August trade balance may extend on weak oil and gas prices. In the U.S. industrial production and capacity utilization data for October will be the most closely watched economic indicator for the day.
Tuesday, November 18: October house price index data from National Bureau of Statistics of China will lend some perspective on whether or not the country’s economy is in for a hard or soft landing. In the U.K. producer and consumer price index levels for October will be released. With clear indications from the Bank of England that it intends to stay the course on monetary policy for the time being, it would take significant divergence from consensus forecasts for the reports to leave any significant impact on market sentiment. Also on the schedule is German ZEW economic sentiment data, providing a glimpse into the mood of the euro zone’s largest economy. In the U.S. producer price index (PPI) data is forecast to register flat for the month of October. Analysts will carefully parse September Treasury International Capital (TIC) data for September from the Department of Treasury for any impact of a strong U.S. dollar.
Wednesday, November 19: Expect Bank of Japan governor Haruhiko Kuroda’s press conference following the bank’s monthly rate announcement to be a focus of risk narratives on Wednesday as Japanese policymakers continue to press ahead with unprecedented expansion of the country’s monetary base. October housing starts and the release of the notes from the last Federal Open Market Committee meeting will be the primary economic indicators released in the U.S.
Thursday, November 20: Japan’s economy is again the focus on Thursday with the release of October trade data. With the yen continuing to come under pressure on the back of Bank of Japan policy, any signs of export resilience will provide confirmation that policymakers are getting what they are paying for. November purchasing managers’ index (PMI) data for the primary euro zone economies will likely dominate European market sentiment for the day, with German PPI and U.K. retail sales for October factoring into the mix. A slew of fresh U.S. economic data is on the schedule for release, including existing home sales for October, initial jobless claims and consumer inflation figures. Consensus forecasts call for prices at the cash register to contract marginally for the month of October.
Friday, November 21: After a relatively heavy week for economic releases in primary economies, October public debt levels for the U.K. stands to be the only major announcement.
