Wednesday is likely to prove to be the bright spark in an otherwise quiet week for the markets, with traders focused on the UK Autumn statement and eurozone PMIs this morning followed this evening by the FOMC minutes from the November meeting. Providing some interest in between we'll also get core durable goods orders from the US and the latest crude inventory data from EIA.
Needless to say, despite falling in the middle of what is typically a relatively quiet Thanksgiving week, Wednesday should prove to be quite eventful. To get us warmed up this morning we'll get flash manufacturing and services PMI data from the eurozone, Germany and France. The numbers are expected to be relatively unchanged from the previous month which, given that these are all now in growth territory, will come as something of a relief for investors while underlining the long standing growth challenges for the region. Once again it seems Germany is expected to be relied upon to be the main engine of growth for the euro area.
The UK Autumn statement will be the first opportunity for Philip Hammond to make his mark on post-Brexit Britain. Fortunately for the new Chancellor, the economy has shown an impressive resilience to the vote so far which will enable him today to only loosen the purse strings a little to support those most affected, while continuing to focus on slashing the deficit and bringing down the "eye-wateringly large" debt. The more conservative approach today will allow extra room for a more substantial response from the Treasury as and when the storm arrives, assuming of course that the economy will be hit as hard as many predict.
Core durable goods orders and the FOMC minutes will be on the radar this afternoon as focus quickly shifts to the US. With a December rate hike all but priced in and many FOMC policy makers having spoken since the meeting, I wonder just how significant the minutes will be this evening. I think traders will be more concerned about the pace of tightening after December, with a number of policy makers having indicated since the meeting that rates will likely rise next month. That said, with the meeting having come less than a week before Donald Trump's election victory, I'm not even convinced that any insight that officials would have chosen to offer will be of any real significance now going into next year, given that a number of things could now change over the next couple of years and we're not entirely sure what exactly they are.
Finally, given the kind of moves we've seen in oil over the last couple of weeks, it's worth paying close attention to the EIA crude inventory release this afternoon. The rally in oil appears to have temporarily stalled, possibly reflecting a scepticism among traders that the cartel can push the deal over the line, with markets having been sold on this repeatedly in the past only to be disappointed. API also released inventory data on Tuesday but despite reporting a small drawdown, markets appeared to shrug it off. It will be interesting to see if they do the same if EIA reports a similar decline this afternoon.
For a look at all of today's economic events, check out our economic calendar.