The week ahead - 25 - 29 November 2024

United States – On Tuesday we get the Fed's minutes of the November meeting. The meeting immediately followed the US election, and the minutes might reveal how they see the balance of risks shifting after the outcome. Data releases between the last two FOMC meetings were likely a reason to be more cautious going forward. Wednesday sees an update to the Q3 GDP estimate and the consumption report. We expect core PCE to come in at 0.3% m/m, lifting the y/y to 2.8%. The enduring pressure on core is supported by solid spending, on the back of hurricane rebuilds, and income growth (both +0.4%).

Eurozone – Flash HICP inflation is expected to rebound, mostly on the back of the lower base in energy prices. We also expect core inflation to edge slightly higher, driven by elevated services inflation, which continues to see pass-through of high wage growth. The rebound is expected by the ECB, so will not derail a December rate cut, which remains our base case.

The Netherlands – On Friday, the flash estimate of inflation (CPI) will be published. We expect inflation to pick up compared to October due to less favourable base effects in goods and energy. Zooming out, Dutch inflation remains services driven with past, present and future wage growth as well as rent indexation adding to firm services inflation. Together with the tight labour market and the expansive fiscal stance of the Dutch government we expect inflation to continue outpacing the eurozone average in 2025 and 2026.

China – As the PBoC kept its 7-day reverse repo rate on hold since September and the loan prime rates remained unchanged on 20 November, we expect the 1-year medium-term lending facility rate (decision scheduled between 22 and 25 November) to be kept at 2.00%, in line with consensus. That said, going forward we expect additional piecemeal monetary easing and stepwise fiscal support, partly to offset the drags from the assumed flaring-up of the bilateral tariff war with the US under Trump 2.0.