Despite a raft of good economic data, sentiment seems to be ebbing, impacting global markets [1e0b863c]. American consumer spending has risen but remains brittle, affecting the U.S. economy [1e0b863c]. The Wall Street earnings season has been positive, influencing investor sentiment [1e0b863c]. China's industrial profits have fallen less than expected, impacting the Chinese economy [1e0b863c]. Aussie PPI (Producer Price Index) has modestly increased, affecting the Australian economy [1e0b863c]. Carbon prices in New Zealand and the EU have remained stagnant, impacting the carbon market [1e0b863c]. The UST 10-year yield has seen little change, influencing bond markets [1e0b863c]. The Kiwi dollar has remained stable, affecting foreign exchange markets [1e0b863c]. Beijing authorities have effectively pegged the yuan to the US dollar, impacting currency markets [1e0b863c]. The price of Bitcoin has slightly decreased, influencing the cryptocurrency market [1e0b863c]. National plans to adjust the Emission Trading Scheme settings have been announced, but speculators remain unconvinced, impacting the carbon market [1e0b863c].
Despite the positive economic data, sentiment is ebbing, which could have implications for global markets [1e0b863c].
The University of Michigan (UoM) will release the preliminary Consumer Sentiment Index for November, along with its crucial 5-year Consumer Inflation Expectations, on Friday, November 10, at 15:00 GMT [902eaf03]. Market consensus is for a slight decline in the index from 63.8 to 63.7 [902eaf03]. A further deterioration in consumer sentiment could weigh on market sentiment and impact the US Dollar [902eaf03]. The US Dollar lost momentum following the FOMC meeting and weak US employment data, which reinforced market expectations that the Fed's tightening cycle is complete [902eaf03]. The University of Michigan Consumer Sentiment Index is not expected to have a decisive impact, but it could help either resume the decline of the US Dollar or provide a basis for a potential rally [902eaf03].
Economic sentiment in the US has improved, with the Penta-CivicScience Economic Sentiment Index (ESI) increasing by 1.7 points to 33.7 [622469b5]. Confidence in the overall US economy saw the largest increase, rising 5.4 points to 36.5, its highest increase in over a year [622469b5]. This improvement in economic sentiment is likely to have a positive impact on US markets.
Despite the ebbing sentiment globally, the US economy has seen some positive developments. Consumer spending in the US has risen, although it remains brittle [1e0b863c]. The Wall Street earnings season has been positive, boosting investor sentiment [1e0b863c]. These factors, along with the increase in the Penta-CivicScience Economic Sentiment Index, indicate a more optimistic outlook for the US economy.
In contrast, China's industrial profits have fallen less than expected, impacting the Chinese economy [1e0b863c]. The Producer Price Index (PPI) in Australia has modestly increased, affecting the Australian economy [1e0b863c]. Carbon prices in New Zealand and the EU have remained stagnant, impacting the carbon market [1e0b863c]. The UST 10-year yield has seen little change, influencing bond markets [1e0b863c]. The Kiwi dollar has remained stable, affecting foreign exchange markets [1e0b863c]. Beijing authorities have effectively pegged the yuan to the US dollar, impacting currency markets [1e0b863c]. The price of Bitcoin has slightly decreased, influencing the cryptocurrency market [1e0b863c]. National plans to adjust the Emission Trading Scheme settings have been announced, but speculators remain unconvinced, impacting the carbon market [1e0b863c].
The University of Michigan Consumer Sentiment Index for November is expected to provide further insight into consumer sentiment in the US [902eaf03]. A decline in the index could weigh on market sentiment and impact the US Dollar, while an increase could help support the currency [902eaf03]. The index will be released on Friday, November 10, at 15:00 GMT [902eaf03].
A 2023 IMF working paper found that economic news from the US affects financial conditions in emerging markets, with employment having the strongest effects [56d8dc6e]. News about the US economy and monetary policy is an important risk factor in the pricing of emerging market assets [56d8dc6e]. US Fed Chair Jerome Powell stated that inflation is still too high, labor market tightness has eased, and economic activity has been expanding at a solid pace [56d8dc6e]. Positive data from the US, particularly regarding employment, could lead to lower credit dollar spreads on dollar-denominated emerging market government bonds, benefiting African countries seeking to tap into the Eurobond market [56d8dc6e]. However, the economic outlook remains uncertain, and the US Fed is prepared to maintain the current target range for the federal funds rate for longer if appropriate [56d8dc6e].
Overall, the improving economic sentiment in the US is likely to have a positive impact on US markets, providing a boost to investor confidence and potentially supporting the US Dollar. Additionally, positive US economic data, especially related to employment, could benefit African economies by lowering credit dollar spreads on dollar-denominated emerging market government bonds, particularly for countries seeking to access the Eurobond market [56d8dc6e].