The summit, held on the Indonesian island of Bali, marks the first time the G20 meets since Russia’s February invasion of Ukraine.
The war and worries over global inflation, food and energy security have overshadowed the meeting. Tensions are high amid the war in Ukraine and ongoing high inflation levels.
Ιnvestors probably still reeling from one of the most dramatic weeks in recent market history.
Last week’s key driver of sentiment was October’s US inflation report, where both the headline and core rate of CPI unexpectedly softened.
Weaker-than-expected inflation figures sparked a dramatic repricing of the Fed’s policy path next year, slamming the dollar and fueling a huge rally in stocks and gold.
The Nasdaq was up 8% on the week. Yet, amazingly, the dollar was down 4%, its fourth most significant weekly decline since the era of free-floating exchange rates began over 50 years ago.
From a financial markets’ standpoint, this data overshadowed US mid-term elections, where expectations of a Republican ‘red wave’ faltered.
Cryptocurrencies were in the hot seat last week amid FTX’s filing for bankruptcy after Binance walked away from a possible acquisition. Despite the surge in stocks, Bitcoin was down about 20% last week.
The fallout from the collapse of the cryptocurrency exchange FTX will continue reverberating through the crypto market.
Global economic growth prospects are confronting a unique mix of headwinds, including lingering pandemic effects such as China’s lockdowns and disruptions in supply chains.
G20 meets in Indonesia – What else?
The week ahead is packed with the regular flow of economic data and policymaker speeches.
Regarding economic event risk, next week, the US will see more Fedspeak, PPI and retail sales data.
Moreover, the UK and Canada will release inflation data.
US retail sales numbers for October should provide insight into how consumers are faring ahead of the key holiday shopping season amid historically high inflation. Economists are expecting an increase of 0.8%.
The U.K.’s Office for National Statistics releases October inflation figures.
Canada’s inflation report for October could help guide expectations for the Bank of Canada’s interest rate outlook.
U.K. Chancellor Jeremy Hunt is set to announce the government’s new fiscal plan. Markets will be watching closely after September’s mini-budget from predecessor Kwasi Kwarteng sent the sterling tumbling and forced the Bank of England to intervene to stem a rout in the bond market.
The US Labor Department reports the number of worker filings for unemployment benefits in the week ended Nov. 12.
Japan’s Statistics Bureau releases annual inflation data through October.
Finally, the US National Association of Realtors reports October sales of previously owned homes.
For more economic events, watch our Economic Calendar.
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