The Week Ahead: UK investors brace for most consequential Budget in a generation

It’s another busy week for financial markets as investors look to the UK’s major fiscal set piece of the year, the Autumn Budget, on Wednesday. Tax hikes are assured but markets will be watching closely for what the political fallout could be.

The last few days has seen some big moves in equity markets on a volatile AI trade. Nvidia’s results beat expectations, but the uplift proved temporary. AI valuation concerns are colliding with expectations the Fed won’t deliver a Christmas rate cut next month. 

Meanwhile we’ll keeping close watch on energy markets and defence stocks amid pressure Ukraine from the US to strike a peace deal with Russia.

Here’s the key events to watch this week.

Monday, 24 November

EU trade ministers meet in Brussels to discuss EU-US and EU-China trade relations, with US Commerce Secretary Howard Lutnick scheduled to join the meeting.

Germany’s Ifo business climate report is due after Friday’s soft PMI pointed to slackening activity in the Eurozone’s main economy. Zoom reports earnings.

Tuesday, 25 November

The European session starts with update German GDP figures and import prices. Rescheduled US PPI inflation data is set to be released, along with retail sales figures, the Richmond Fed manufacturing index and Conference Board consumer confidence survey. 

Alibaba earnings is the corporate highlight with investors looking at margins amid aggressive spending on AI and cloud. Meanwhile Huawei is set to unveil its new flagship smartphones of the Mate 80series and the foldable Mate X7.

Wednesday, 26 November

Budget Day arrives in the UK with the Chancellor, Rachel Reeves, expected to make sweeping tax changes as she tries to fill a fiscal black hole, meeting funding pledges and her own fiscal rules. We’ve covered a lot of the preamble to the Budget, but there is more. We’ll have a special post-Budget analysis webinar on Thursday, 27 November.

Elsewhere, in the overnight session Australian CPI inflation numbers and the Reserve Bank of New Zealand rate decision could see some movement in FX crosses. The RBNZ is expected to cut by 25bps. US data is back with unemployment claims and durable goods orders. It looks like PCE inflation and GDP data originally slated for today will be released at a later date. The Fed releases its Beige Book of regional economic assessments.

Thursday, 27 November

Thanksgiving holiday in the US ensures it will be a light session and potentially quite thin liquidity. The Bank of Korea is expected to hold its base rate steady at 2.5%, while the European Central Bank publishes the accounts of its 30 October rate decision. Late in the evening as Asian markets reopen for their Friday session we expect Tokyo core CPI inflation, which will be watched closely following the recent stimulus measures and commentary from the Bank of Japan suggesting it will look at the “feasibility and timing” of a rate hike in coming meetings, indicating a very cautious approach to further tightening.

Keep an eye on luxury stocks with Remy Cointreau due to report first half results.

Friday, 28 November

Preliminary CPI inflation numbers come out of Germany, Italy and France at the start of the European session. It’s also Black Friday, the traditional start of the Christmas shopping season in US, so expect plenty of media interest on some of the big retail stocks.