This week's key agenda: China's November PMI, major inflation indicators from the United States, and the Federal Reserve's meeting minutes

A summary of major financial events from November 25 to December 1, all in Beijing time:

This week's key focus: China's November PMI, October core PCE price index, revised U.S. third-quarter GDP, Eurozone November harmonized CPI, Japan's November CPI.

In addition, the U.S. will release October durable goods orders, the Reserve Bank of New Zealand will announce its interest rate decision, Germany and France will release November CPI, and China will announce profits of industrial enterprises above designated size for October.

In terms of earnings reports, Hong Kong stocks will see reports from Bosideng, Zhihu-W, MEITUAN-WR, and Miniso, while U.S. stocks will have reports from Zoom Video Communications, Meituan (MPNGY), and Miniso (MNSO).

China's November Official PMI and Caixin Manufacturing PMI

• On Saturday (November 30), the National Bureau of Statistics will release the November official PMI.

Data released last month showed that China's official manufacturing PMI was 50.1%, an increase of 0.3 percentage points from the previous month, marking two consecutive months of recovery and rising into the expansion zone. The non-manufacturing business activity index was 50.2%, up 0.2 percentage points from the previous month.

Zhao Qinghe, a senior statistician at the National Bureau of Statistics Service Industry Survey Center, interpreted the October PMI data as follows:

“Enterprise production continues to accelerate. From an industry perspective, the production index and new orders index for general equipment, automobiles, electrical machinery, and other industries are all above 54.0%, indicating a rapid release of production and demand; however, the production index and new orders index for wood processing and furniture, chemical raw materials and chemical products, and non-metallic mineral products are all below the critical point, indicating insufficient production and demand.”

Wang Qing, chief macro analyst at Dongfang Jincheng, believes that the improvement in expectations driving production acceleration is the main driving force behind the rise in October's manufacturing PMI, with the production index at its highest level in nearly six months, corroborated by nearly all major industries such as steel, cement, chemicals, and automobiles rebounding in operating rates since October.

On the same day, S&P Global will release the November Caixin Manufacturing PMI.

Data released last month showed that China's October Caixin Manufacturing PMI recorded 50.3, an increase of 1.0 percentage points from the previous value of 49.3, returning above the expansion-contraction line after a brief contraction in September.

The data indicates an increase in manufacturing supply, with demand shifting from contraction to slight expansion. The new orders index for manufacturing in October rose to its highest level since July.

Federal Reserve Releases Minutes from November Monetary Policy Meeting

• On Wednesday (27th), the Federal Reserve will release the minutes from the November monetary policy meeting.

Although the Federal Reserve did not adjust interest rates this month, the descriptions of inflation data, policy stance, and economic outlook in the meeting minutes are of great importance.

This week, a series of hawkish remarks from Federal Reserve officials have cast a shadow over the highly anticipated prospect of a rate cut in December. Chicago Fed President Austan Goolsbee stated in a speech that he supports further rate cuts and is open to acting at a slower pace. This suggests that the speed and magnitude of future rate cuts are more significant for Federal Reserve officials than whether to cut rates at allThe pricing in the money market shows that investors currently expect the probability of the Federal Reserve cutting interest rates in December to be slightly above 50%, with a total expected cut of only 67 basis points from now until the end of 2025. Economists at HSBC noted in a report that the minutes from the Federal Reserve's November meeting may reflect discussions among some decision-makers about the potential economic impact of the U.S. election results.

In addition to the topic of interest rate cuts, the U.S. government's debt issue is also worthy of investors' attention. According to the semi-annual financial stability report released by the Federal Reserve on the 22nd local time, the sustainability of U.S. government debt has become the biggest risk to financial stability.

Release of the Federal Reserve's Favorite Inflation Indicator

• On Wednesday (27th), the U.S. will release the actual GDP for the third quarter and the revised quarter-on-quarter PCE annualized figures.
• On the same day, the U.S. will release the PCE price index for October.

Data released last month showed that the actual GDP for the third quarter grew by 2.8% quarter-on-quarter, which was below expectations, while the core PCE price index rose by 2.2% quarter-on-quarter, exceeding expectations.

The U.S. September PCE data showed that the core PCE price index rose by 0.3% month-on-month, the highest level since April this year, with the previous value revised from 0.1% to 0.2%.

After Trump won the presidential election, the Federal Reserve's stance on interest rate cuts became increasingly cautious. As Trump pushed for tax cuts and increased tariffs, Wall Street generally worried that inflationary pressures would further intensify in the coming year.

Nomura Securities became the first major investment bank to predict that the Federal Reserve will not cut interest rates next month. Analysts believe that officials have been emphasizing patience recently, and that economic growth and inflation data are more hawkish than the forecasts made at the Federal Reserve's September meeting. Therefore, it is expected that the Federal Reserve will pause interest rate cuts in December.

Powell stated in a speech on the 15th that the recent performance of the U.S. economy has been "quite good," providing the Fed with the space to be cautious about cutting rates, indicating that there is no rush to cut rates, and that the Fed has time to first understand and assess the economic impact of future Trump policies before reacting.

50 Basis Points Rate Cut in the Eurozone in December is on the Table

• On Friday (29th), the Eurozone will release the harmonized CPI for November.

Data from last month showed that the October Eurozone CPI data met expectations, returning to the target level of 2%.

However, the PMI data released on Friday was quite "bleak": it showed that business activity in the Eurozone declined again, with both the services and manufacturing PMIs entering contraction territory. The service sectors in Germany and France accelerated their contraction.

After the data was released, the euro hit a two-year low, and the market significantly increased bets on the European Central Bank cutting rates by 50 basis points next month, with the probability jumping from around 15% to over 50%.

On Friday, European Central Bank Governing Council member Mario Centeno stated that Eurozone inflation has reached the target, but the economy faces challenges. A strong economy is needed to prevent inflation from falling below 2%, and the neutral interest rate may be around 2% or lower. He prefers to cut rates in a gradual and stable manner.

"But in the case of (economic) downturns, larger rate cuts can be discussed."JP Morgan Private Bank global market strategist Matthew Landon stated:

“This PMI report indeed puts a 50 basis point rate cut on the table, betting on the euro is the company's 'preferred short' trade in the foreign exchange market.”

Other Important Data, Meetings, and Events

• China announces profits of industrial enterprises above designated size for October

On Wednesday (27th), China will announce the profits of industrial enterprises above designated size for October.

Last month's data showed that profits of industrial enterprises above designated size in China fell by 27.1% year-on-year in September, while profits in the consumer goods sector continued to grow steadily. From January to September, the total profit of industrial enterprises above designated size nationwide was 522.816 billion yuan, a year-on-year decrease of 3.5%.

Yu Weining, a statistician from the Industrial Department of the National Bureau of Statistics, interpreted:

“In terms of prices, the factory prices of industrial products remain sluggish, and the decline in the producer price index for industrial producers in September continued to expand, putting significant pressure on corporate revenue and profits; in terms of revenue, from January to September, the operating income of industrial enterprises above designated size grew by 2.1%, a decrease of 0.3 percentage points compared to January to August; in terms of costs, the growth rate of corporate costs exceeded that of revenue, leading to a decline in gross profit and insufficient support for profit growth. In addition, the significantly elevated base since August this year has also put pressure on profit recovery.”

• Meituan announces Q3 financial report

On Friday (29th), Meituan will announce its Q3 2024 performance.

The Q2 financial report showed that Meituan achieved revenue of 82.25 billion yuan in the second quarter, with an adjusted net profit of 13.6 billion yuan, of which core local business revenue grew by 18.5% year-on-year to 60.7 billion yuan, and the operating loss of new businesses narrowed significantly by 75%.

Guohai Securities expects Meituan to achieve total revenue of 92.1 billion yuan in Q3 2024 (YoY +20.5%, QoQ +12%); core local business revenue of 68.7 billion yuan (YoY +19%, QoQ +13%), of which the catering takeaway business is expected to generate revenue of 45.9 billion yuan (YoY +15%, QoQ +13%), with an operating profit margin of 17.8% (YoY +2.9 pct); the flash purchase business is expected to generate revenue of 6.7 billion yuan (YoY +42%), with an operating profit margin of 0.3% (YoY +2.4 pct); the in-store hotel and travel business is expected to generate revenue of 15.4 billion yuan (YoY +25%, QoQ +11%), with an operating profit margin of 35% (QoQ +1 pct); new businesses are expected to generate revenue of 23.5 billion yuan (YoY +25%, QoQ +9%), with an operating profit margin of -8% (YoY +20 pct).

• Reserve Bank of New Zealand announces interest rate decision and monetary policy statement

On Wednesday (27th), the Reserve Bank of New Zealand will announce its latest interest rate decision, and the bank's chairman Orr will hold a monetary policy press conference.

In August, the Reserve Bank of New Zealand unexpectedly cut interest rates, lowering them from 5.5% to 5.25%, marking the first rate cut since March 2020. The Reserve Bank of New Zealand stated that it believes inflation has been controlled and will fall and remain within the target range of 1% to 3%

• Multiple economies release important economic data

On the 27th, the United States released October durable goods orders data; Australia released October CPI data.

On the 28th, Germany released November CPI data; the Eurozone released November economic sentiment index.

On the 29th, Japan will release October CPI data; France will release October PPI, November CPI, and third quarter GDP data; Canada will release annualized quarter-on-quarter GDP for the third quarter.

On December 1st, South Korea will release November import and export data