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Trading Week Outlook: Nov. 28 - Dec. 2

|Includes: SPDR Dow Jones Industrial Average ETF (DIA), EEA, GBB, GOLD, JYN, UDN, USD
Nov. 26, 2011 ( – The week ahead will mark the beginning of the final month of the year with a series of important U.S. economic data culminating with the Non-Farm Payrolls and Employment Situation report, as traders continue to ponder the impact of the EU debt crisis, the state of the U.S. economy and the odds of a QE3 announcement at the Fed’s December 13 meeting.  

In preparation for the new trading week, here is the outlook for the Top 10 spotlight economic events that will move the markets around the globe. 

1.    USD- U.S. New Home Sales, an important gauge of housing market conditions measuring the number of newly constructed homes with a committed sale during the previous month, Mon., Nov. 28, 10:00 am, ET.

In light of the better-than-expected existing home sales report, sales of new homes in the U.S. could follow suit with a small increase to 315K in October from 313K in September. 

2.    USD- U.S. Consumer Confidence Index of consumers’ outlook on present and future economic conditions, Tues., Nov. 29, 10:00 am, ET.

The confidence of U.S. consumers is forecast to recover from the disappointing drop to 39.8 in September as the index rises to 43.0 in October.
3.    EUR- Euro-zone HICP- Harmonized Index of Consumer Prices, the main measure of inflation, Wed., Nov. 30, 5:00 am, ET.  

Inflationary pressures in the Euro-zone are expected to remain unchanged at 3.0% y/y in November, same as the 3.0% y/y reading in October, but the European Central Bank might just look the other way as rising borrowing costs and fears of a double dip have placed concerns about the stubbornly high inflation on the back burner for the time being. 

4.    USD- U.S. ADP-Automatic Data Processing Employment Report, a measure of jobs lost or added to the private sector of the economy, also serving as a leading indicator of the monthly non-farm payrolls, Wed., Nov. 30, 8:15 am, ET.

After adding 110K new jobs in October, the U.S. private sector payrolls are forecast to continue the trend with another 130K jobs in November. An upbeat ADP report could offer a nice prelude to Friday’s non-farm payrolls. 

5.    CAD- Canada GDP- Gross Domestic Product, the main measure of economic activity and growth, Wed., Nov. 30, 8:30 am, ET.

The Canadian economy is forecast to return to growth by up to 0.4% q/q in the third quarter of 2011 after shrinking unexpectedly by 0.1% q/q in the second quarter. The data should be in line with recent forecasts expecting that the Canadian economy may slow down but would be able to avoid a recession, as growth picks up from 2.1% y/y in 2011 to 2.4% in 2012 and above 3.0% y/y in 2013. 

6.    USD- U.S. Pending Home Sales, a leading indicator of housing market activity measuring the amount of homes under contract to be sold, Wed., Nov. 30, 10:00 am, ET.

An optimistic sequence of housing market data could continue with the U.S. pending home sales index which is forecast to rise by 1.4% m/m in November after the disappointing drop by 4.6% m/m in October.    

7.    CHF- Swiss GDP- Gross Domestic Product, the main measure of economic activity and growth, Thurs., Dec. 1, 1:45 am, ET.

Growing at 0.3% q/q pace in the first quarter, the Swiss economic growth in the second quarter was revised lower at 0.4% q/q from the preliminary estimate of 0.6% q/q, and it is expected to slow again to 0.2% q/q in Q3 2011. The lower GDP reading should serve as an indicator of the negative impact of the strong franc on the Swiss economy, which coupled with the rising threat of deflation could prompt the Swiss National Bank into additional action to weaken its currency.   

8.    USD- U.S. ISM Manufacturing Index, a leading indicator of industrial activity, where a reading above or below 50 is the dividing line between economic expansion and contraction, Thurs., Dec. 1, 10:00 am, ET.  

While purchasing managers indexes in other major economies have been declining into contraction territory, the U.S. manufacturing and services indexes have managed to sustain above the 50 boom/bust line. The U.S. manufacturing sector is forecast to show resilience for another month with an ISM manufacturing index reading of 51.5 in November from 50.8 in October.

9.    CAD- Canada Employment Situation and Unemployment Rate, the main gauge of employment trends and labor market conditions, Fri., Dec. 2, 7:00 am, ET.    

Following the dismal October report when the Canadian labor market lost 54,000 jobs, the economy is expected to add up to 17,000 new jobs in November. The unemployment rate is forecast to stay at the same 7.3% level in November.

10.    USD- U.S. Non-Farm Payrolls and Employment Situation Report, one of the most important indicators of economic health, measuring the number of new jobs created or lost in the world’s largest economy, Fri., Dec. 2, 8:30 am, ET.

The upbeat economic data throughout October was followed by some reports with negative undertones throughout November, raising QE3 odds. With more FOMC policy makers warming up to the idea of additional asset purchases ahead of the Fed’s meeting on December 13, the Non-Farm Payrolls report will be a crucial part of the QE3 puzzle. The consensus forecasts are pointing to another cautiously optimistic for the U.S. labor market report with the economy adding up to 117,000 jobs in November, compared with 80,000 in October, while the unemployment rate remains unchanged at 9.0%.