According to analysts at Nordea Markets, the most important releases will be the more forward-looking sentiment indicators, such as Germany’s ZEW expectations on Tuesday 12 November and the US NFIB small business survey that same day.

Key Quotes

“Germany’s ZEW expectations index has improved after hitting its lowest level since 2011 back in August. The latest Sentix survey suggests that ZEW likely improved further in November. If the ZEW expectations index does improve, while the numbers will still likely suggest downside risks to ECB’s growth forecasts, the figures will be interpreted as if the EA has finally turned a corner and easier financial conditions are finally doing their (positive) thing.”

“The US small business survey NFIB rarely creates more than a ripple in financial markets, but since small businesses are key for job creation, we like to pay attention anyway. Here we note that its most recent job opening numbers, while high, seem to be consistent with a looming recession. The last five times NFIB momentum deteriorated as quickly as it has done over the past year, the US was in or about to enter a new recession. In 1979 the US entered a recession four months later. In 1981 the economy had been in a recession for three months. In 1989 a recession followed 11 months later. In March 2001 the recession started that same month, and in 2007 the recession followed eight months later. Economic or equity bulls are likely hoping that the recent weakening reflects temporary trade war concerns and that these numbers will rebound shortly.”

“US retail sales growth for October is due on Friday, and here the consensus is looking for a robust pick-up. Consumption growth has been resilient – more resilient than it should be vs our models. Perhaps part of this resilience can be explained by households’ front-running shopping ahead of what was supposed to be Trump’s tariff hikes on Chinese goods? If so, we could be in for a disappointment in the week to come.”