06 November 2023
- Israel is escalating its ground operations in Gaza, carrying out airstrikes targeting hundreds of Hamas positions. The conflict, now in its third week, has led to a telecommunications blackout in Gaza, disrupting rescue operations. The humanitarian situation is dire, with shortages of essential supplies such as food, water, and medicine, leading residents to break into UN warehouses for survival supplies. The Palestinian Red Crescent has received warnings to evacuate hospitals due to Israeli threats. Despite international calls for a ceasefire and humanitarian aid, the conflict persists. Israel has deployed troops into Gaza, focusing on destroying Hamas infrastructure, and international leaders are expressing concern about the situation.
- The United States is seeking a more useful and effective trade program with Africa, according to U.S. Trade Representative Katherine Tai, while negotiations are underway to update the African Growth and Opportunity Act (AGOA). AGOA, which provides duty-free access to the U.S. market for qualifying African exports, is set to expire in September 2025. While African nations are seeking an early 10-year extension to avoid congressional hurdles, the Biden administration is calling for changes as part of the renewal. The revised AGOA should improve utilization by qualifying countries, account for the African Continental Free Trade Area, and include more small business participation. U.S. business associations support the AGOA’s reauthorization, emphasizing its importance in combating China’s influence in Africa and global efforts to reduce dependence on Chinese manufacturing. However, the political gridlock may pose challenges to the renewal of the AGOA.
- Japanese Prime Minister Fumio Kishida announced ongoing trilateral cooperation with the Philippines and the United States to safeguard the freedom of the South China Sea during his official visit to the Philippines. Japan and the Philippines have begun negotiations on a mutual troop access deal to enhance military cooperation, as both nations are concerned about China’s increasing assertiveness in the region. Kishida assured Japan’s support in improving the Philippines’ security capabilities, thereby contributing to regional peace and stability. Japan also agreed to provide coastal surveillance radars to the Philippines as part of its Official Security Assistance (OSA) program.
What to watch out for this week
- United States: The US FOMC meeting will be in the spotlight, with expectations of interest rates remaining unchanged. Investors are keen to assess clues regarding the December meeting and the conditions that could lead to rate cuts next year. The US jobs report is also expected to reveal a modest increase of 172,000 non-farm payrolls in October, a notable drop from the 336,000 jobs added in September. The unemployment rate is expected to remain stable at 3.8%, with monthly wage growth projected to increase from 0.2% to 0.3%. Additionally, other releases to watch for include ISM PMI surveys for October, JOLTs job openings, Q3 Employment Cost Index, Productivity, Case-Shiller home prices, ADP Employment Change, factory orders, and regional activity indices such as the Dallas Fed Manufacturing Index and Chicago PMI.
- Euro Area: Retail sales are expected to fall for the third consecutive month in September, with Germany’s factory orders also expected to decrease, followed by a decline in industrial activity in Italy. Other data of interest include Services and Construction PMIs, final inflation figures for Germany, France’s trade balance, Russia’s inflation rate, Switzerland’s unemployment rate, and Turkey’s foreign trade data, industrial activity, and unemployment rate.
- United Kingdom: The preliminary estimate of Q3 GDP growth will be released, along with reports on industrial production, foreign trade, and construction output. The UK economy is expected to have contracted in Q3, reversing growth in three consecutive quarters.
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