LONDON (Reuters) – The long-awaited UK fiscal plan is (almost) here, with markets paying close attention after the riots unleashed by September’s mini-budget.
Chaos reigns in the crypto country as troubles reverberate for cryptocurrency exchange FTX, while the latest US and China data come at a time when hopes of a peak interest rate are mounting. .
Let’s take a look at the upcoming week of the market for Elizabeth Howcroft, Tom Wilson, Amanda Cooper and Mike Dolan from London, Vidya Ranganathan from Singapore and Ira Iosebashivili from New York.
1/ Closing date finally
The moment pound traders have been waiting for is almost here. On November 17, Treasurer Jeremy Hunt announced the government’s fiscal plan.
September’s mini-budget from predecessor Kwasi Kwarten brought the pound to its knees and forced the Bank of England to intervene to stem the bond market crash.
Hunt has since scrapped most of that plan, suggesting about £60bn ($68.7bn) of tax increases and spending cuts to close a large fiscal hole.
The UK market has recovered most of its biggest losses from the mini-budget, but the outlook is grim. The economy is facing its longest recession in a century as the cost of living crisis hits.
The latest inflation and employment numbers are also on the calendar. With inflation he hit a blazing 10.1% in September and there is little reason to expect a temporary respite.
Graphic: UK sows rebound after September budget cuts – https://graphics.reuters.com/GLOBAL-MARKETS/mypmozznpr/chart.png
2/ Crypto Chaos
The cryptocurrency world is in a new turmoil due to the FTX meltdown. As of Thursday, major exchanges were on the brink of collapse and users were unable to withdraw their funds.
A proposed bailout deal from rival exchange Binance failed Wednesday, sending the cryptocurrency bitcoin below $16,000 for the first time since late 2020.
Cryptocurrency investors are in shock. FTX founder Sam Bankman-Fried was considered by many to be the “poster child” of the industry. Investors are now waiting to see if FTX can be saved, and the extent of the contagion within the crypto market, which has already been hit hard as the central bank reversed its pandemic-era monetary policy this year.
Graphics: Pain in Cryptoland – https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/lbvggrkadvq/chart.png
3/ IT cloud
This year’s plunge in big tech stocks shows little signs of ending – driven by pressure on real consumer incomes, recession fears and a rethinking of valuations due to higher interest rates that discount future earnings to today’s prices. It is
Mass layoffs are now occurring after warnings about online advertising and streaming services littered the third quarter earnings season. Meta Platforms has announced that it will cut more than 11,000 jobs, or 13% of his workforce.
It’s the biggest of the year and follows layoffs at other tech companies, including Elon Musk-owned Twitter, Microsoft and Snap. Large banks are also cutting staff.
The market will be watching to see if other companies follow suit, to see if this is simply overheating, pandemic-distorted staffing levels and cuts, or the thin end of a wedge deepening the coming recession. I’m trying Central banks are also watching like hawks.
Graphic: Tech in the red Tech in red – https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/klpygearxpg/chart.png
Wednesday’s October US retail sales should give the market an idea of how consumers are behaving ahead of the important holiday shopping season.
Also, remember that the Federal Reserve is keen to raise interest rates to keep violent inflation in check, even if that means stifling spending in the process.
September data showed underlying retail sales measures rose, thanks to strong wage gains and savings, despite broader numbers flattening out.Researched by Reuters Analysts expect a 0.8% increase in October.
Those who prefer bad news to good news will see strong numbers as proof that the Fed has more to do to cool the economy. That outlook is unlikely to bring joy to markets battered by hopes of tightening monetary policy this year.
GRAPHIC: US retail sales flat in September – https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/lgvdkmdgypo/chart.png
5/ buy rumors
Chinese stocks are celebrating Beijing easing some of its strict COVID rules, including shortening the quarantine for close contacts of infected people and inbound travelers by two days. This comes despite a six-month high on the mainland and new lockdowns in some big cities.
The data ahead will serve as an unceremonious reminder of the toll of draconian COVID policies, with retail sales declining and industrial production hit by a draconian lockdown during last month’s 20th Party Congress. As a result, real estate sales have been declining for a long time.
The half glass picture shows green sprouts in the promises the authorities have made on growth and expectations for more policy support. One test is whether China’s central bank will renew a huge trillion yuan medium-term loan to banks that matures on Tuesday.
Graphics: Chinese Reality Check Chinese Reality Check – https://graphics.reuters.com/GLOBAL-MARKET/THEMES/zdvxdymznvx/chart.png
(Graphics by Vincent Flasseur, Kripa Jayaram, Vineet Sachdev, Riddhima Talwani, Sumanta Sen, Editing by Dhara Ranasinghe, Editing by Alison Williams)