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  • US Durable Goods orders set to return to positive territory
  • Weakness in German PMI data could cause fresh headaches for the ECB
  • UK house price growth could heap more pressure on BoE to hike rates


Ater a quiet start to the week, Tuesday sees the publication of the flash Markit PMI data for November from the UK, Europe and the US. As always, the point to watch for is the number holding above the break-even 50 mark. It’s fair to say that broadly there’s anticipation that the numbers will continue to trend lower as the post-pandemic rebound normalises and economies continue to struggle with labour constraints and rising input costs. Expectations are that all key metrics will continue to show some degree of expansion, although with many European countries now looking at fresh lockdowns, this could serve to blunt growth. Specifically, German Services PMI could slip below 52, making for its worst print since the spring. UK Services PMI is tipped to decline slightly from the October print of 59.1 to something around 58.5, a move which is unlikely to placate those inflationary fears amongst policymakers.


Wednesday sees the release of the German Ifo Business Climate reading for November. This is tipped to decline for a fifth consecutive month with a reading of around 97 being forecast, down from the October print of 97.7 and could present further challenges for policymakers who are left countering the challenge of how to manage high inflation against a deteriorating economic outlook.

October’s US Durable Goods Order data for October will also be out today, with hopes that this number can snap back to growth after September’s unexpected dip into negative territory. Labour shortages and supply chain disruption both present challenges here, as does falling demand from China, so a quick return to growth may provide some confidence that even if the US economy is decelerating from the rampant growth seen earlier in the year, it’s still doing so in an orderly manner.

The latest FOMC Meeting Minutes will also be released today, which may give a fresh take on any concerns that economic weakness is creeping in. With inflation running above 6%, it’s increasingly obviously that the Fed needs to take action so the volume of hawkish comments will be closely watched. Anything that brings forward expectations of a rate hike from well into 2022 will in turn bolster the dollar.


Thursday may see a rather subdued session with US markets closed for the Thanksgiving holiday. Closer to home however, German Consumer Confidence data for December will be published and the forward-looking aspect of this as the country faces fresh COVID challenges will put the number under a degree of scrutiny. The number has only just managed to fight back into positive territory in the wake of the pandemic – historically readings of around +10 were seen – and opinions are divided as to what this latest print will bring. It should land in positive territory and that may be sufficient to placate markets given the increasingly torrid backdrop, but the Eurozone as a whole still remains challenged by the legacy of lax monetary policy and the global health crisis.


Rounding out the week, we have the UK Nationwide Housing Prices for November. These numbers are being closely followed given the end of the stamp duty holiday and suggestions that mortgage borrowing costs are starting to edge a little higher, too. With that in mind, a modest decline from the 9.9% annualised reading posted in October would be no surprise, although if this reading remains stubbornly high it’s going add yet more ammunition to the idea that the BoE needs to cut rates quickly.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Tony Cross

Tony Cross

Tony Cross is a market commentator with over 15 years of experience, producing compelling, insightful copy for journalists and investors alike. Focusing on macroeconomics, UK blue chip equities and inter market analysis, Cross's commentary is well regarded for its clarity and ability to cut through the waffle. He has been quoted in publications as diverse as The Financial Times, The Times, The Guardian and The Sun. He has also been a regular guest on both Share Radio and TipTV.

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