Business & Finance
Brought to you by: Pastor Real Estate & Barclays
A fresh batch of key macro data out next week from the main developed economies look set to be mixed as markets are bouyed by fresh optimism over declining trade tensions.
The second estimate of US gross domestic product (GDP) is expected to confirm that the economy expanded by 1.9% in the three months to September. The deceleration in US growth is evident compared to 2018 levels, but data out of the country continue to be expansionary and supportive of steady GDP growth. Protectionism-driven weakness in the corporate sector is still more than offset by strong consumer spending. October’s consumption, out next week, is expected to confirm this trend and will likely be lifted by increasing optimism around a “phase one” trade deal between the US and China.
In the eurozone, inflation remains subdued after further edging down in October on the back of the region’s anemic growth profile. There are unlikely to be large upside surprises in November’s harmonised index of consumer prices flash print, which should remain well below target and warrant loose monetary policy.
However, with European Central Bank measures losing their effectiveness and the central bank running out of ammunition, fiscal spending and structural reform is now expected to play a more important role in stimulating the economy. That said, we believe that a step up in fiscal loosening would only occur in the event of deteriorating macro data.
The week ahead looks quieter in the UK, where we expect key prints from the housing market to be mildly encouraging. UK house prices growth has been modest throughout 2019, with London becoming the slowest growing region amid Brexit-led uncertainty. However, we wouldn’t be surprised to see an uptick in the November’s Nationwide house price reading. Low interest rates and heightened hopes for a Brexit resolution are likely to have delivered much needed relief to the UK housing market.
The S&P 500 has broken record highs once again this month. More interestingly, the recent move has occurred simultaneously with volatility falling to noticeably low levels. But is the period of market calm set to last?
Improving sentiment stems from optimism around Brexit, after the increasing likelihood that a no-deal departure will be avoided, and reports of “constructive talks” between the US and China.
However, there are some caveats worth addressing in respect of this rosy picture. Firstly, as the chart shows, volatility at such low levels may persist over the short to medium term. But at some point it is likely to increase, often triggered by something as small as a presidential tweet.
Secondly, we have seen the US and China trade negotiation movie before. A similar rally occurred the last time President Trump and his counterpart President Xi negotiated, earlier this year, only for talks to fall apart at the last minute. The result was a spike in volatility and a market sell-off resulting from escalating trade tensions.
For more information contact Barclays Private Bank in Monaco by clicking here or on +377 93 15 35 35
China's Chimelong Group has participated as a partner in the Monte-Carlo International Circus Festival for the first time ever, deepening the friendship between China and Monaco.
More than 350 economic players came together for the first MEB Members Meeting of the year, during which a full calendar of events for 2020 was unveiled.
Company news will pick up pace this week, with fourth-quarter earnings being published for more than 800 companies. That said, key macro data and economic news will also remain on investors’ watch list.
The Monegasque Department of Labour is taking its commitment to the Extended Monaco programme to the next level with a restructured system for employees and job seekers.
The third annual Ladies Vintage Car Rally is almost here again with the same purpose as the very successful previous events, to raise funds for Child Care Monaco’s girls’ school in India. This year’s Rally on September 18 takes on a new dimension with Place du Casino of Monte-Carlo especially privatised for the event.
Organiser Martine Ackerman reminds participants that, unlike many motoring events in Monaco, this is not a race. “Come enjoy, or even drive the beautiful vintage cars thanks to the great help and support of Fabrice Leroy from Rent a Classic Car and the other sponsors such as Café de Paris, Restaurant CastelRoc, Organic Spa & Hair, Champagne Taittinger and many more,” Martine says.
The theme for 2016 is “Belle en perles – Coco Chanel style,” which needs no translation. The day starts at 8:15 am in front of the Casino, with departure at 9 am, and ends at Palace du Palais at 7 pm, with a cocktail and awards giving at Le Castelroc restaurant. Martine emphasises the need for everyone participating to contact firstname.lastname@example.org before September 1, and in her usual friendly manner adds: “If you have any questions, needs or requests, we are here to help you!”
In 2012, Martine set up the association Child CARE Monaco with the objective to offer education to underprivileged children all over the world. After several visits to India, they established the Sneh Girls School, which welcomes 90 girls every day on borrowed premises. But the facility has quickly proved too small as it also accommodates girls from villages nearby so the following year, Child CARE Monaco build a school with a dispensary, two additional classrooms and a playground.
If you can't make the Ladies Vintage Car Rally, you can help by sending a donation or sponsoring a child age 5 to 13 for €149 per year, which covers 1 school year, 2 meals per day, basic medical needs and the school uniform.