Are central banks really getting closer to target?

Are central banks really getting closer to target?

Corporate Earnings News
Global market indices
Fixed Income
Commodity sector news
Key data to move markets this week
Global macroupdates

Corporate Earnings News

Corporate earning calendar 23 November - 30 November 2023

Thursday: Via Optronics
Monday: Zscaler
Tuesday: CrowdStrike, Intuit, Workday, Hewlett Packard Enterprise, Splunk, NetApp Inc. 
Wednesday: Snowflake, Synopsys, Dollar Tree, Hormel Foods,Campbell Soup Company, Five Below, Nutanix, Sealed Air Corp., Foot Locker
Thursday: Salesforce, Dell Technologies, Kroger, Movado Group, Titan Machinery

US Stock Indices

Nasdaq 100 +11.04% MTD and +46.26% YTD
Dow Jones Industrial Average +6.16% MTD and +5.86% YTD
NYSE +6.63% MTD and +4.77% YTD
S&P 500 +8.43% MTD and +18.44% YTD

Mega caps: A mixed week for the “magnificent seven” mega caps as market’s remained uncertain about the Fed’s future direction. Apple, Alphabet, Amazon, Meta Platforms, Microsoft, and Tesla are all up this week. Amazon appears to have climbed ahead of Black Friday and Cyber Monday sales following today’s US Thanksgiving holiday. Microsoft gained on news Sam Altman will return to lead OpenAI. Nvidia Corp. dropped after its results. Nvidia is down this week due to concerns around the widening of US chip curbs affecting its growth in China, its third largest market. This was despite the release of its Q3 results, which showed that it tripled revenue, year-over-year, for the third quarter of its financial year and a forecast which indicated current-quarter revenue of $20 billion, plus or minus 2%, beating analysts' average estimate by more than $2 billion, according to LSEG data. However, because China contributed more than a fifth of its total revenue in the quarter ended 29 October, investors have been spooked by its announcement that it expects a steep drop in sales to China in Q4.

Energy stocks had a mixed week this week as energy sector stocks fell about 11% on concerns around OPEC+’s future plans, global demand, and potential oversupply all hitting markets. Occidental Petroleum, Baker Hughes, and Halliburton are all down this week. ExxonMobil, Phillips 66, Marathon Petroleum, Shell, Chevron, Apa Corp (US), ConocoPhillips, and Energy Fuels are all up this week.

Materials and Mining stocks had a mixed week. Zinc continues to be oversupplied as weak economic activity hits industrial manufacturing, especially in Europe. The global zinc market showed a surplus of 489,000 tons during the first eight months of the year, up from a surplus of 156,000 tons in the same period last year, data from the International Lead and Zinc Study Group showed. Nickel is suffering the same fate with the global nickel market having a surplus of 23,900 metric tons in September, up from a surplus of 14,200 tons in the same month of last year, according to data from the International Nickel Study Group (INSG). Copper has managed to rebound since hitting 11-month lows in October, but was weighed down by a firmer US dollar this week. Yara International, Mosaic, Sibanye Stillwater, and CF Industries Holdings are all down, while Nucor Corporation, Freeport-McMoRan, Newmont Mining, and Albemarle Corporation are all up on the week.

European Stock Indices

Stoxx 600 +5.44% MTD and +7.61% YTD
DAX +7.75% MTD and +14.61% YTD
CAC 40 +5.45% MTD and +12.16% YTD
IBEX 35 +9.65% MTD and +20.15% YTD
FTSE MIB +5.09% MTD and +22.98% YTD
FTSE 100 +2.02% MTD and +0.24% YTD

Other Global Stock Indices 

MSCI World Index +8.32% MTD and +13.91% YTD
Hang Seng +3.64% MTD and -10.35% YTD


The US dollar continued to fall for most of the past week, with the dollar index falling to its lowest level since 31 August, as investors continued to bet that the Fed would begin its rate cutting before the end of Q2 2024. However, it managed to recover slightly from Tuesday following the release of the minutes from the Federal Reserve's last meeting indicating the central bank was likely to maintain the higher for longer stance for the foreseeable future. The recovery continued after the jobless claims data came in well below consensus expectations. The GBP is +2.81% MTD and +3.23% YTD against the USD. Sterling had risen during the week hitting a 10-week high against a weaker dollar after BoE Governor Andrew Bailey reiterated the central bank's stance that interest rates would not change any time soon. However, on Wednesday, UK finance minister Jeremy Hunt unveiled a range of tax cuts in his Autumn budget, but forecast a much more sluggish economic outlook. Hunt said GDP is expected to grow by 0.7% in 2024; this was significantly down from the 1.8% forecast in the Spring outlook in March by the Office for Budget Responsibility (OBR), the UK’s independent fiscal watchdog. The OBR also said UK economic output would grow by 1.4% in 2025 and by 1.9% in 2026 - weaker than its previous forecasts of 2.5% and 2.1% respectively.

The EUR is +2.94% MTD and +1.73% YTD against the USD. However, there are still differing opinions about the future direction of ECB with Governor of the Bank of Portugal, Mario Centeno, saying he expected macroeconomic conditions would lead to a reversal in the bank's recent cycle of rate hikes in the near future, German Central Bank President Joachim Nagel saying rates in the eurozone are close to their peak in the current cycle or may have already reached it, ECB Executive Board member Isabel Schnabel saying that while disinflation is underway, it is expected to slow as a strong labour market and stubborn service prices are contributing to the persistence of inflation, and ECB President Christine Lagarde saying that the ECB would need to stay “attentive to the different forces affecting inflation.” Markets will be looking closely at the October policy meeting minutes later today along with PMI data for clues on the ECB’s monetary policy path.


Bitcoin +8.65% MTD and +127.98% YTD
Ethereum +14.76% MTD and +73.81% YTD

Bitcoin was hit by Binance chief Changpeng Zhao pleading guilty to breaking US anti-money laundering laws. He faces possible jail time. Zhao has been replaced by Richard Teng, a senior Binance executive who joined in 2021. The company, the world’s largest crypto exchange, agreed to pay a $4.3 billion settlement. It is still unclear how much influence Zhao, as Binance's founder and major shareholder, could continue to have on Binance. Investors pulled about $956 million from the company in the 24 hours following Zhao stepping down. Data from crypto analytics platform Nansen said the outflows were small relative to the more than $65 billion of assets that remain in Binance. Binance still faces a civil lawsuit with the SEC. 

Fixed Income

US 10-year yield to 4.41%.
German 10-year yield to 2.56%.
UK 10-year yield to 4.15%.

US benchmark 10-year yields fell over the past week as investors continued to anticipate an earlier rate cut from the Fed in 2024. In the UK yields rose on Wednesday, after UK finance minister Jeremy Hunt used his Autumn Statement budgetupdate to cut business and household taxes.


Gold futures to $2,013.20 an ounce.
Silver futures to $24.13 per ounce.
West Texas Intermediate crude to $77.10 a barrel.
Brent crude to $81.67 a barrel.

Gold has spent most of the past week benefitting from a weaker US dollar and falling Treasury yields. However, this changed on Wednesday’s inflation expectations data and initial jobless claim data, both of which caused the US dollar to rise and yields to pare losses as the market re-evaluated its expectation of a rate cut in late Q2 2024. Lower interest rates typically boost gold prices as they reduce the opportunity cost of holding non-yielding assets.

OPEC+ producers unexpectedly delayed its 26 November meeting to 30 November, raising questions about global crude supplies. Oil fell on the news before bouncing back after it was reported that the delay may have been due to Saudi dissatisfaction with other members’, particularly African countries, which are among the smaller producers, oil production levels. As noted by Bloomberg news, crude is down about 18% from its September peak, and has defied expectations that OPEC+’s production cuts would cause a rapid tightening in markets. US crude oil inventories rose again last week by 8.7 million barrels on higher imports, the Energy Information Administration (EIA) said on Wednesday. The outlook for next year is also bleak for oil producers, with potential for a renewed surplus in the first half. 

Note: As of 5 pm EST 22 November 2023

Key data to move markets this week


Thursday: German Composite, Manufacturing, and Services PMIs, Eurozone Composite, Manufacturing, and Services PMIs, ECB Monetary Policy Meeting Accounts.
Friday: German GDP, a speech by Bundesbank President Joachim Nagel, German IFO Business Climate, Current Assessment and Expectations Surveys, and speeches by ECB President Christine Lagarde and Vice President Luis de Guindos.
Tuesday: German Gfk Consumer Confidence.
Wednesday: Spanish Harmonised Index of Consumer Prices, Eurozone Business Confidence, Economic Sentiment and Consumer Confidence Surveys, and German CPI and Harmonised Index of Consumer Prices. 


Thursday: S&P Global/CIPS Composite, Manufacturing, and Services PMIs.
Friday: Gfk Consumer Confidence.
Tuesday: A speech by BoE Monetary Policy Committee member Jonathan Haskel.


Thursday: Markets closed forThanksgiving holiday.
Friday: S&P Global Composite, Manufacturing and Services PMIs.
Monday: New Home Sales Change.
Tuesday: Housing Price Index.
Wednesday: GDP, Core Personal Consumption Expenditures Prices, Personal Consumption Expenditures Prices, and the Fed’s Beige Book.

Global Macro Updates

Will the UK government’s “Autumn statement for growth” work? UK Finance Minister Jeremy Hunt used his Autumn Statement to cut business and personal taxes by £20 bn on Wednesday. The statement included a cut to employee National Insurance from 12% to 10% for 27 million workers, changes to benefits programmess, a freeze on alcohol duty, additional business tax breaks, investment in AI and manufacturing, and a rise in the minimum wage. The independent Office for Budget Responsibility (OBR) estimates that these measures will boost employment by 144,000 and raise economic output by 0.3% in the medium term. The OBRdowngraded its growth forecasts on Wednesday with GDP growth expected to be 0.7% in 2024, 1.4% in 2025, 1.9% in 2026 and 2% in 2027, a significant drop from the OBR's forecasts earlier this year, which predicted growth at 1.8% in 2024, 2.5% in 2025, 2.1% in 2026 and 1.9% in 2027. Unemployment is now expected to peak at 4.6%, higher than in the March forecast, and to remain elevated for longer.

Mixed messages for the Fed. In a signal of continued tight labour market conditions, initial jobless claims hit a five-week low, falling to 209,000 in the week ending 18 November, the labour department said on Wednesday. The previous week’s claims were at 233,000. An additional concern for the Fed is the latest University of Michigan inflation survey, which showed that inflation expectations rose to 4.5% over the next year, up from 4.2% in October and from 3.2% in September. It was the second straight month of rising expectations. Over a five-year period, consumers now see inflation running at 3.2%, up from 3.0% in October and 2.8% in September. That is the highest since 2011. 

Slowing demand for labour and subsiding inflation have led markets to conclude the Fed had finished its hiking cycle. This view was, at least somewhat, supported by the minutes of the Fed’s 31 October-1 November meeting published on Tuesday which showed that while policymakers noted that labour market conditions remain tight, they had also noted that they had eased since earlier this year partly as a result of recent increases in labour supply. However, what is clear is that the economy is starting to slow, with the Commerce Department's Census Bureau reporting that orders for durable goods dropped 5.4% last month and data for September was revised lower to show orders for these goods rising 4.0% instead of the previously reported 4.6%. With an election slated for some time in 2024, Wednesday’s statement is being seen as much more political in nature and is likely to not have a positive impact on the UK’s longer term finances. It is not clear how much of a sustainable impact the tax breaks may have on the economy or on inflation. Inflation is still at more than double the Bank of England’s target.

Is the ECB near its target? German Bundesbank President Joachim Nagel and ECB Governing Council member Joachim Nagel told Der Spiegel that the goal has not yet been reached in terms of inflation. "We can see that the target is gradually coming into view: inflation is falling. But we also know that it has not yet been reached and that inflation can rise again quickly," he said. As noted by Bloomberg news, the ECB’s rate moves have raised the prospect that the euro-area economy might be damaged more severely, with Vice President Luis de Guindos telling Bloomberg Television earlier Wednesday that investor expectations of a so-called soft landing might be “wishful thinking.” Last quarter the economy contracted 0.1%. Eurozone growth appears to be anaemic with the November Eurozone Flash Composite PMI coming in at 47.1 from October's near three-year low of 46.5. Although an improvement, it is still firmly below the 50 mark separating growth from contraction. The Services PMI rose to 48.2 this month from 47.8 and the Manufacturing PMI, which has contracted every month since July 2022, remained in contractionary territory, coming in at 43.8, a slight improvement on October’s 43.1. The new business index rose to 46.7 from 45.6.

While every effort has been made to verify the accuracy of this information, EXT Ltd. (hereafter known as “EXANTE”) cannot accept any responsibility or liability for reliance by any person on this publication or any of the information, opinions, or conclusions contained in this publication. The findings and views expressed in this publication do not necessarily reflect the views of EXANTE. Any action taken upon the information contained in this publication is strictly at your own risk. EXANTE will not be liable for any loss or damage in connection with this publication.


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