Week Ahead: Economic Indicators (US)
For the November 18th week, here is a list of the major economic indicators released during the US Session.
Tuesday 19th November
08:30 ET
US Housing Starts for October
US Housing Starts measures the number of new residential construction projects that have begun over a specific period, typically monthly.
It’s a key economic indicator, as increased housing starts suggest strong economic growth and consumer confidence, while declines may signal an economic slowdown.
Housing starts data provides insight into construction activity, employment, and future housing supply, influencing real estate, construction, and finance sectors.
What to Expect
This release is unlikely to cause a meaningful market reaction.
Having said that, if Housing Starts come out higher than expected, we would expect to see strength across the US assets (Dollar, bond yields, and US stocks), as it would indicate that the consumer is doing well in the face of tight financial conditions, and that demand for housing was strong.
If it came out weaker than expected, then we would expect weakness across the US assets for the opposite reason.
Canadian CPI for October
The Canadian Consumer Price Index measures the average price change over time for a basket of goods and services commonly purchased by households in Canada.
It’s a primary gauge of inflation, tracked monthly by Statistics Canada, reflecting how prices fluctuate for items like food, shelter, clothing, and transportation.
The CPI impacts monetary policy, as the Bank of Canada uses it to guide interest rate decisions, controlling inflation and maintaining economic stability.
What to Expect
If Canadian inflation comes out higher than expected, we would expect to see weakness in CA stocks, and strength in CAD, as it would increase the chances of a pause from the BoC rate cuts, as rates may need to stay higher in order to make sure that inflation is completely under control.
If it comes in lower than expected, we would expect CA stocks to strengthen and CAD to weaken, as it would increase bets on the BoC continuing its rate reduction path.
Wednesday 20th November
10:30 ET
US Weekly EIA Crude Oil Inventories
The US Weekly EIA Crude Oil Inventories report, released by the Energy Information Administration, measures the weekly change in the amount of crude oil held in US commercial storage facilities.
It’s a key indicator for energy markets, as it reflects the balance between oil supply and demand.
What to Expect
An increase in inventories suggests lower demand or higher production, often putting downward pressure on oil prices, while a decrease can indicate higher demand or reduced production, typically pushing prices up.
Thursday 21st November
08:30 ET
US Weekly Initial & Continued Jobless Claims
The US Weekly Initial & Continued Jobless Claims report tracks unemployment insurance claims to gauge the health of the job market. Initial claims measure the number of people filing for unemployment benefits for the first time, indicating new job losses.
Continued claims reflect the number of individuals who remain unemployed and are still receiving benefits after their initial filing.
Together, these metrics provide timely insights into labor market conditions and potential economic shifts.
What to Expect
With employment in focus at the moment, this report has been garnering a lot of market attention.
A higher jobless claims number, indicating higher unemployment, would be likely to cause weakness across the US assets (dollar, stocks, and yields), as it feeds into the narrative of a hard landing/broader economic slowdown for the US economy as we come out of the tightening cycle.
A lower jobless claims number, indicating lower unemployment, would be likely to cause strength across the US assets, as it reassures the markets that the US economy may be able to exit the tightening cycle and enter the easing cycle without a recession/broader economic slowdown.
Keep in mind that there has been some volatility in the US equity markets reaction to this data point, as the markets are fighting between the data’s indicator on the broader economy, as well as the potential future impact the data has on monetary policy.
10:00 ET
US Existing Home Sales for October
US Existing Home Sales is a monthly report released by the National Association of Realtors (NAR) that measures the number of previously owned homes sold during the month.
This includes single-family homes, townhouses, condominiums, and co-ops.
The report provides insights into the health of the housing market, consumer confidence, and overall economic conditions.
An increase in existing home sales indicates strong demand and economic growth, while a decrease may signal a slowdown in the housing market or broader economy. It is a key indicator of real estate trends in the US economy.
What to Expect
This release is unlikely to cause a market reaction based on the prior months data.
Having said that, higher-than-expected home sales would underline strong demand for homes from US consumers, which would help alleviate fears of an economic slowdown.
This would be likely to cause strength across US asset classes (stocks, bonds, and the dollar)
If it comes out lower than expected, the opposite could be true.
Friday 22nd November
09:45 ET
US S&P Manufacturing & Services PMI November Prelim
The US S&P Manufacturing & Services PMI are monthly economic indicators compiled by S&P Global that measure the activity levels in the manufacturing and services sectors, respectively.
As diffusion indices, a reading above 50 indicates expansion, while below 50 signals contraction.
US S&P Manufacturing PMI: Assesses the performance of the manufacturing sector by surveying purchasing managers about new orders, production, employment, supplier delivery times, and inventory levels.
US S&P Services PMI: Evaluates the services sector by surveying purchasing managers on factors like new business, employment, input prices, and business expectations.
What to Expect
Higher than expected PMIs would increase the chances for a soft landing, especially if the employment breakdown in the report is positive, as this indicates there is still enough demand to feed into corporate profits and overall US growth, which would be likely to cause strength in US stocks and the dollar.
The opposite is likely true if it were to come in lower than expected.
10:00 ET
University of Michigan Sentiment Survey
Conducted by the University of Michigan, the survey gauges consumers’ attitudes and expectations regarding personal finances, business conditions, and overall economic prospects.
The survey results are presented as an index, with higher values indicating greater consumer confidence.
In this report, respondents can also give their forecasts for 1-year and 5-10-year ahead inflation expectations, which the markets pay attention to.
What to Expect
When it comes to the headline sentiment read, a higher consumer sentiment number at the moment would be seen as bullish for US stocks and the dollar, as it indicates that the consumer is feeling good about the economic environment, which reduces the chances for a hard landing coming out of this Fed tightening cycle.
When it comes to inflation expectations, the markets will want to see these coming in lower than expected, which would increase confidence in the Fed’s ability to reduce rates and start to stimulate the areas of the economy that have shown weakness.
This would likely cause strength in US stocks.
