Will markets see a misjudgement on inflation this week?

Published on 13 November 2023

Luca Paolini, chief strategist at Pictet Asset Management, flags up the big events this week which might impact investment and trading events , including a misjudgement on inflation; the property market in China; leverage in aspects of the government bond market, and a misalignment of housing data expectations in the US; plus the timing of weakening economic data.

North America

• Equities ticking up. cost of liquidity is range bound.

• Fixed income volumes up on last year and up on last month

• Data: US Inflation, PPI and retail data, with big quarterly reports in retail and tech/telco.

• Primary Equities: 6 IPOs expected at $92.6 million. The biggest deal expected is DDC Enterprises.

• US axe data saw a very slight shift towards dealers asking more than bidding.

Europe and the UK

• Equities volumes still subdued for the year and down relative to November 2022. Euro investment grade volumes still up, and bid-ask spreads are tight relative to this period last year.

• Data: EU and Germany sentiment data, inflation figures across several countries including France, Italy and UK, UK unemployment and retail figures released.

• Primary equities: No IPOs expected.

• EU axe data showed a 13% shift from bids to asks last week, but within normal ranges.

• GBP axe data showed slight increase in net buying versus selling of credit.