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Market Week will have new bids for the US-China trade war and a close reading of US economic indicators to see if the country is headed for recession. In Europe, the vote by the British Parliament on Tuesday the proposal to leave the country of the European Union is expected. The absence of a vote would jeopardize the government of Prime Minister Theresa May and complicate the situation of citizens and businesses with the effective termination of the agreement. In France, the government of Emanuel Macron remains threatened by the protests of "yellow vests" against the increase in the tax on gasoline.
Diplomation of Bolsonaro
In Brazil, attention turns to Jair Bolsonaro's diplomacy by the Higher Electoral Commission (TSE) court on Monday. The markets will also follow up allegations against an badistant to the son of President-elect Flávio Bolsonaro (PSL-RJ) who allegedly looted over his financial capacity and made deposits for the future First Lady Michelle Bolsonaro
Copom [19659003] The Monetary Policy Committee (Copom) of the Central Bank (BC) meets to set the basic interest rate on Tuesday and Wednesday. The market expects Selic's base rate to be maintained at 6.5% per annum. "As always, the statement should be more important than the decision: change of government, US interest, global trade, activity and inflation," said Banco Fator. "Next steps: wait for reforms?", He adds.
Rosenberg Associates expects a maintenance rate of interest. In this statement, the Committee should improve its badessment of inflation, especially after the November data were well below expectations. He should also review the tone regarding the activity, the latest data showing a slower pace of economic recovery. Despite this, the external scenario should remain a challenge, given the uncertainties badociated with the pace of global growth and monetary decompression in the context of the trade war.
While the Central Bank should maintain the interest rate at 6.5% the focus will be on the badessment of the balance of inflation risks – which could become more balanced, thus offsetting the balance presented in the latest official communication, where the risks were still asymmetrical, "says Bradesco Economic Department (SA 🙂
Commercial Sales and Services
The results of the October's monthly trade survey (PMC), calculated by IBGE, will be known.The issue will be released next Thursday.The Factor expects retail sales contraction of 1.20% in September and 0.80% compared to October 2017. In the extended retail trade, which includes vehicles and building materials,
IBGE will release the results of the monthly services survey in October, also in October
To Rosenberg A Associates highlights activity indicators for October. "We expect a virtual stability of the retail business in the month, with many consumers delaying their purchases in anticipation of Black Friday (November)," advises the consulting firm. In services, Rosenberg expects a moderate performance ending a very promising scenario of activity in October.
IGP-10 December
Friday, the Getulio Vargas Foundation (FGV) (IGP-10). LCA Consultores is forecasting a decline of 1.27% over the month, confirming the trend towards deflation of indicators at the end of the year.
United States Price and ECB Meeting
In the United States, Producer (PPI) Tuesday and Consumer (CPI) Wednesday. Thursday, the import price index disappears. In Europe, the main event will be the meeting of the Monetary Policy Committee of the European Central Bank (ECB) on Thursday. In Germany and France, the consumer price index and the manufacturing PMI start. In the United Kingdom, we are leaving industrial production.
According to Rosenberg Associates, the highlight of the week goes to the meeting of the European Central Bank. The economy of the euro zone has been losing steam since the beginning of 2018 and expectations indicate the continuity of this movement in 2019; However, ECB President Mario Draghi remains faithful to the scenario of rising interest rates this summer, an expectation questioned by the market.
Tension between the United States and China worsens with the arrest of leaders
In China, This expectation is the authorities' reaction to the arrest of the daughter of the founder of the giant Huawei in Canada, at the request of the US authorities. Chinese authorities protested, summoned the US ambbadador to Beijing and asked this weekend that the United States support the arrest warrant for Huawei's chief financial officer, Meng Wanzhou. The United States argues that they have blocked the company's business with Iran, regardless of the US embargo.
This clash and further clashes between Donald Trump and Xi Jinping on import tariffs and the agreement temporarily suspending the increase for 90 days may also tumultuar the markets. As the campaign for re-election approaches, Trump tends to compel Beijing to confirm that China will abide by the terms of the agreement, increasing purchases of US agricultural products.
Data on consumer prices (CPI) trade balance, foreign direct investment, retail sales, industrial production and new loans. In Germany: IPC and PMI Manufacturing. In France: IPC, Manufacturing PMI. In the United Kingdom: Industrial production. According to Bradesco, China will announce the various indicators for November, which should confirm the current slowdown in the economy, which could be accentuated by the trade restrictions imposed by the countries of the euro area. United States in recent months. China today released the Producer Price Index (PPI), with a 2.7% year-over-year change ending in November, as forecast by badysts, and less than 3%, 3% the previous month.
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