Hello and welcome to the working week.
Overnight results from Brazil will play a leading role in news coverage as the vote brings months of bitter campaigning to an end. Deforestation in the Amazon will be an especially pertinent topic with COP27 kicking off in Egypt at the close of this week.
With veteran Luiz Inácio Lula da Silva falling two points shy of the 50 per cent required to be elected outright in early October, Sunday’s vote will reflect how entrenched “Bolsonarismo” is in the rural areas at the centre of a booming yet ecologically disastrous commodities trade.
Brazil’s interior has undergone significant clearances by agribusiness for cattle, soy and maize during incumbent Jair Bolsonaro’s first term in office. This has reversed a decline in deforestation rates between 2003 and 2015.
Opposition to state intervention fomented support for Bolsonaro this election campaign, though he nevertheless sought to secure the backing of poorer voters with a 50 per cent increase in social welfare payments.
Stakes are high for indigenous communities who have suffered reprisals at the hands of illegal loggers, while being overlooked by legislators seeking to permit the mining of raw materials in reserves without their consent.
On Tuesday, Benjamin Netanyahu will be eager to mount a coup in Israel’s fifth election in less than four years. Leading a rightwing bloc, he is seeking to overcome a small deficit in polling to take a majority in the Knesset and return as the nation’s prime minister.
In the US, looming midterms mean presidents past and present are being rolled out to campaign in support of candidates. The final 72 hours of the campaign will see president Joe Biden and former presidents Barack Obama and Donald Trump appear in Pennsylvania, while the latter will also hold a rally in Florida to close the weekend.
Companies
Brazilian gas company Petrobras is due to publish its Q3 results on Thursday. The company suffered from multibillion-dollar corruption when the left were last in office in Brazil.
Bolsonaro previously spoke of privatising Petrobras, though Lula’s manifesto called for its return as an “integrated energy company” with his party ambitious for it to play a leading role in the nation’s clean energy transition.
Stocks in the company slid last week after polling indicated Lula would rout Bolsonaro in Sunday’s run-off vote. It was among several who lost out on the release of polling, though it also reported that oil production for the third quarter fell 6.8 per cent compared with the same period last year.
Economic data
On Wednesday, the US Federal Reserve will announce its decision on interest rates. Policymakers fear strong wage growth has maintained high inflation, though officials suggested the central bank should begin to prepare for a slowdown in rate rises.
Data published by the US Bureau of Labor Statistics and the nation’s commerce department on Friday showed pay for civilian workers during the third quarter increased by 1.2 per cent, while personal consumption rose 0.5 per cent.
The Bank of England is expected to raise rates by 75 basis points on Thursday to 3 per cent. Rates have severely hampered homeowners, with spillover into the rental market.
In a survey published on Friday, the UK’s Office for National Statistics found half of British respondents with a mortgage said they were worried about a change in interest rates. Two in three people were also spending less on non-essentials and reducing use of gas and electricity.
Monday’s planned fiscal statement in the UK has been replaced with an autumn statement to be delivered by chancellor Jeremy Hunt on November 17.
Key economic and company reports
Here is a more complete list of what to expect in terms of company reports and economic data this week.
Monday
UAE, IMF news conference post-publication of outlook report for Middle East and north Africa
Norway, results of treasury bill auction
Q3: Banco Comercial Português, ON Semiconductor, Japan Tobacco
Tuesday
Switzerland, consumer index
Japan, BoJ monetary policy meeting minutes
US and Russia, S&P Manufacturing PMI
Europe, Q3 gross domestic product
Q3: Saudi Aramco, Alibaba, AMD, Amtek, Airbnb, BP, Coca-Cola, Electronic Arts, Mondelez, Nippon Steel, Pfizer, Sony, Thomson Reuters, Toyota, Uber
Wednesday
Germany, October unemployment rate
New Zealand, reserve bank financial stability report
US, Federal Reserve interest rate decision
World, JPMorgan Global Manufacturing PMI
Q3: Cognizant, CVS Health Corp, eBay, Estee Lauder, Fastly, Ferrari, MetLife, Next, Qualcomm, Roku, Zillow
Thursday
Canada, September trade figures
UK, Bank of England interest rate decision
Europe, September unemployment rate
AGM: Darktrace
Q3: Adecco, BNP Paribas, BT Group, ConocoPhillips, Enel, ING, Kellogg, Moderna, Motorola Solutions, News Corp, Orsted, PayPal, Petrobras, Solvay, Stellantis, Verbund
Friday
Europe, S&P Composite PMI
US and Canada, October unemployment rate
Q3: Duke Energy Corp, Itochu, SoftBank, Telefónica, Qantas
Saturday
Q3: Berkshire Hathaway
World events
Finally, here is a rundown of other events and milestones this week.
Monday
China, space agency launches last of three modules that comprise the Tiangong Space Station
South Korea, five-day military drills with US
US, Supreme Court hears from “anti-affirmative action activists” seeking to bar Howard University and the University of North Carolina from considering race in undergraduate admissions
Tuesday
Germany, chancellor Olaf Scholz visits chemical producer BASF’s site in Schwarzheide before holding so-called “chancellor talks” in Gifhorn
Denmark, voters head to the polls in general election
Wednesday
Ireland, the ECB’s François Villeroy de Galhau to speak in Dublin
Thursday
China, German chancellor Olaf Scholz on the first of a two-day trip
Germany, G7 foreign ministers meet for two-days in Münster
Belgium, European Commission president Ursula von der Leyen meets new Italian prime minister Giorgia Meloni
Latvia, ECB president Christine Lagarde speaks at a conference in Riga
UAE, Opec members and oil executives attend the Adipec conference
Friday
Bahrain, Pope Francis visits the predominantly Muslim country to participate in the nation’s Forum for Dialogue
Saturday
Malaysia, politicians commence 14-days of campaigning ahead of election
Source: Economy - ft.com
