As 2019 gradually rumbles to a close, attention remains trained on the US-China talks, and, to a lesser extent, the UK’s general election.
US: Trade set to dominate final weeks of the year
Though it has arguably always been the case, it is especially difficult at the moment to work out what is going in between the US and China.
The ‘phase one’ trade deal, meant to be signed at some point this month, is looking increasingly likely to be delayed until 2020 – and that is if it materialises at all. The rolling back of tariffs and the treatment of Hong Kong are two of the real big sticking points, ones that don’t seem set to be resolved any time soon.
Even though there is a general election going on in the UK, it is hard to see anything rivalling the trade situation for investors’ attention in the final few weeks of 2019, meaning the markets might be in for another confusing, tricky to read week.
Supplementing this renewed trade anxiety is a smattering of US data, including the CB consumer confidence number on Tuesday, and the preliminary third quarter GDP reading on Wednesday. Things sort of grind to a halt in the latter half of the week, however, due to it being Thanksgiving on Thursday.
UK: Election and the trade war
Unable to properly escape its $1.28 to $1.295 trading band, the last couple of weeks have nevertheless been pretty kind to cable. The Brexit Party’s decision to not challenge Tory MPs has put the Conservatives in the electoral driving seat, something that has kept the right-leaning currency fairly buoyant.
Without any major election moments, it could be a quiet one for sterling, the only pieces of data on offer – e.g. Monday’s CBI realised sales and Friday’s net lending to individuals – hardly headline-grabbing stuff. For the FTSE, meanwhile, it will likely remain preoccupied with the trade war developments.
UK: Stocks to watch
It’s a busy start to the week for corporate earnings with Compass Group, Cranswick and Shaftesbury results out on Tuesday while Marstons and Brewin Dolphin are on Wednesday and Grainger on Thursday.
Eurozone: Beijing and Washington to dominate
There are a few intriguing bits of data in the Eurozone this week, namely the German CPI figures on Thursday, and the French GDP and region-wide inflation readings on Friday. However, any news about the situation between Beijing and Washington will no doubt take precedent over more local updates.
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