Smart Look At The Week Ahead: Impact Of The Trade War

The impact of America’s trade dispute with China will come under the microscope through the October trade balance. The US trade deficit is expected to shrink slightly, with both imports and exports lower compared to September.

China will also announce its trade balance for November. That will be closely scrutinised too. In October it widened to US$43 billion from $39 billion in the previous month. The trade balance for November could come in at US$28 billion, which would be the lowest since April.

China will report some closely-watched purchasing managers’ indices for November. Both manufacturing and services could have expanded modestly.

The state of America’s labour market will be on display through November’s non-farm payroll numbers. In October, 180,000 jobs were created. Another set of strong numbers – around 175,000 – is expected for November.

October retail sales number for the Eurozone will be on show. In September, they increased 3.1% over the same month in the previous year. The growth rate is expected to drop back to 1.8%, which is still above the long-term average of 1.1%.

The Reserve Bank of Australia will announce its latest interest-rate decision. In October, it left the cash rate unchanged at a record low of 0.75%, which was widely expected. The central bank recently said that it is happy to wait and assess the impact of three rate cuts since June.

Staying with central banks, the Reserve Bank of India might cut interest rates at its meeting next week. The Indian economy expanded at its weakest quarterly pace since the first three months of 2013. The RBI, which has already cut rates five times this year could be ready to trim them by another quarter point.

Malaysia’s balance of trade is forecast to double to almost RM16 billion in October from the previous month. It could be a sign of a relocation of supply chains from China to cheaper locations that include Malaysia.

And finally, it has been an awful time for Hong Kong shopkeepers. Retail sales volumes have dropped in eight straight months. October could be just as bad. The forecast is for a 20% drop, following a 20% contraction in September.

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None of the information in this article can be constituted as financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life. Disclosure: David Kuo does not own shares in any of the companies mentioned.