With key economic data and Nvidia earnings scheduled, this week will provide important signals for global market directions.
This week, the market focus will be on flash manufacturing and services economic data (PMIs) from major economies, including the eurozone, the UK, and the US. Additionally, the artificial intelligence powerhouse Nvidia is set to report its quarterly earnings, gauging the technology sector’s growth trajectory.
In the markets, investors will need to continue watching the US dollar’s strength and how it impacts commodity prices and other currencies in the G-10 group and emerging markets. Fed Chair Jerome Powell’s hawkish stance on interest rates may continue pushing up the dollar, pressuring both the euro and European equity markets.
Europe
S&P Global is set to release the flash data of manufacturing and services PMIs for major European economies, including Germany and France.
The eurozone manufacturing PMI was revised to 46 in October, up from 45 in the previous month, suggesting a slower rate of decline in the sector. However, the reading marks the 28th consecutive month of contraction in the region, the longest downturn in history. A data below 50 indicates contraction.
In Germany, the data improved to 43 in October from a 12-month-low of 40.6 in the previous month, which showed that a trough may have been reached.
In France, manufacturing activity contracted for the 21st consecutive month in October, printing at 44.5. The reading may have been due to significantly weakened overseas demands as geopolitical tensions weighed on purchasing power. Consensus suggests that business activities in the manufacturing sector will slightly improve to 43.1 in Germany and 44.6 in France in November.
In the services sector, eurozone activity expanded for the ninth consecutive month, printing at 51.6 in October but at a soft pace. Germany’s services activities expanded for the seventh month in October, recorded at 51.6, which is also the first rise in five months. In France, services PMI printed at 49.2 in October, contracting for the second consecutive month, the sharpest contraction since March due to a steep decline in overseas orders.
Services PMI is expected to modestly increase to 51.8 in Germany, while France may extend contraction, with an estimated figure of 49.0. The Eurozone’s data is forecasted to remain the same at 51.6.
In the UK, manufacturing PMI fell into contraction, revised down to 49.9 in October due to caution ahead of the Budget. Services activities continued to expand but at a slower pace of 52.0 in October, down from 52.4 in the previous month. Consensus suggests that manufacturing PMI will return to expansion at 50.1 and services PMI may improve slightly to 52.3.
Additionally, the UK will release the CPI data for October, with an expectation that headline inflation may rise to 2.2% from 1.7% in the previous month, which is a similar pattern with other economies, such as the eurozone and the US.
United States
Nvidia is set to unveil earnings for the third quarter of the fiscal year 2025 on Wednesday 20 November. The biggest beneficiary of the artificial intelligence boom is expected to report earnings per share of $0.74 (€0.70) on revenue of $32.81bn, representing an increase of 85% and 81.1% year on year.
Nvidia became the world’s biggest company in valuation, surpassing Apple this month following news that it will join the Dow Jones Industrial Average. Its earnings results are a critical indicator of the technology sector for the global markets.
On the economic front, the research firm S&P Global will also release flash November manufacturing and services PMIs for the US. In October, business activities in the manufacturing sector extended contraction for the fourth consecutive month while services PMI continued to expand. The downtrend in the manufacturing sector may have been due to fallen new orders amid uncertainties ahead of the US election in October. Both data are expected to remain the same patterns in November.
Asia-Pacific
In the Asia-Pacific region, the People’s Bank of China (PBOC) will decide on the 1-year and 5-year loan prime rates (LPR), which are seen as key lending rates for corporate and mortgages. In October, the bank lowered both rates by 25 basis points, as part of stimulus measures. The bank is expected to keep the interest rates unchanged this month as two consecutive reductions are unlikely.
The Reserve Bank of Australia (RBA) will release its policy meeting minutes for November. The bank kept the policy rate at a twelve-year high of 4.35% and indicated its monetary policy would stay restricted for some time, despite cooling inflation.
Markets expect the bank to commence rate cuts in May of 2025. The bank’s hawkish stance is in contrast to other major central banks which have delivered rate cuts multiple times this year.