The week ahead

The end of the first week has left most assets little changed from the previous week. The exception to this is the US government bond market (TLT) where small gains have been registered. There is a modest hope that the decline in US inflation can be sustained and that this can set the way for a more modest increase in US interest rates and eventually a pause or reversal.

The week ahead

You can access the calendar of economic events from the Economic Calendar tab. You will see that there are no significant releases. There may be some attention on Durable Goods data for October to be released on Thursday. This will outline the capital spending plans of US firms. These should be expected to be cut back if interest rate increases are causing firms to be cautious about investment as theory suggests. There is some small-scale evidence of that from the recent performance. Weekly unemployment claims and the Consumer confidence data at the end of the week may also provide some thoughts about US economic activity.

China

An outbreak of Covid cases in Beijing may temper hopes that the strict Chinese Covid policy could come to an end. There had been rumours that a softening of quarantine rules would be established. This, it was hoped, would temper the damage to the Chinese economy. However, any changes in Chinese government policy are likely to be gradual. Chinese firms make up a large part of the EEM emerging economy index.