Popular Keywords
News
Key Focus This Week: U.S. PCE & China PMI
Last week, the U.S. stock market gained momentum, driven by strong performance in cyclical sectors, with the S&P 500 rising 1.68% to close at 5,969.33 points. In the bond market, concerns about a U.S. economic recession continued to ease. However, as the effects of the “Trump trade” gradually faded, the 10-year U.S. Treasury yield saw a slight decline. Meanwhile, the U.S. Dollar Index breached the 107 mark, supported by weakness in non-U.S. currencies.
Key Economic Data Review for Last Week
China LPR: The People’s Bank of China (PBOC) kept the 1-year and 5-year Loan Prime Rates (LPR) steady at 3.1% and 3.6%, respectively. Since September, the Chinese government has introduced a series of monetary easing measures alongside a comprehensive debt restructuring plan worth 10 trillion yuan to stimulate economic growth.
Retail sales and industrial output have shown signs of recovery, yet the property market remains sluggish, and weak consumer and producer prices highlight lingering deflationary risks. The PBOC governor has indicated that policy rates may be further adjusted based on market liquidity by the end of the year, leading to expectations of a 25-basis-point LPR cut before year-end.
Japan CPI: Japan’s October CPI rose 2.3% year-on-year (previous: 2.5%), primarily reflecting a sharp deceleration in electricity and gas price increases. However, core-core CPI (excluding food and energy) climbed to 2.3% (previous: 2.1%), marking the third consecutive month of increases since falling below 2% in July.
While Bank of Japan Governor Kazuo Ueda did not specify the timing of the next rate hike during the last meeting, the persistent strength in core inflation and the yen’s recent depreciation—likely to amplify imported inflation—have led markets to anticipate the next hike in late December or January.
Key Economic Data for This Week
U.S. Fed Minutes (11/27): The Federal Reserve cut rates by 25 basis points at its November meeting and adopted a more neutral stance compared to September, removing phrases such as “Has gained greater confidence that inflation is moving sustainably toward 2 percent” and “Job gains have slow” from its statement. This week’s meeting minutes will shed light on the Fed’s perspective on the 2025 rate-cut trajectory and any potential discussions about balance sheet adjustments.
U.S. PCE Inflation (11/27):The Personal Consumption Expenditures (PCE) in October is expected to align with latest CPI figures, reflecting a rebound due to low base effects. The holiday season may also contribute to higher consumer prices. According to the Cleveland Fed, October PCE is projected to rise by 2.29% year-on-year (previous: 2.09%), with core PCE expected to increase to 2.76% (previous: 2.65%).
China PMI (11/30): China’s manufacturing sector is expected to receive support from the continued impact of the government’s “trade-in” policy, strong “Singles’ Day” promotional activity, and a surge in exports prompted by Trump’s election. As a result, market forecasts suggest that November’s PMI will likely remain in expansion territory.
