Macroeconomics: The Day Ahead – 23 December 2020

Good Morning: The Long & the Short of it and The Bigger Picture

Written by Marc Ostwald, ADMISI’s Global Strategist & Chief Economist

  • US data dominates schedule ahead of holiday break, but Brexit, US fiscal package passage and pandemic related news still holding all the aces;  Durable Goods, Personal Income/PCE, Jobless Claims, New Home Sales and  final Michigan Sentiment; digesting Australia Trade and Oct BoJ minutes
  • US Durable Goods Orders: core measures set for solid rise, Boeing Orders  imply substantial downside risk for headline
  • US Personal Income / PCE: modest setbacks expected, downside risks on Income
  • US weekly jobless claims: upward surge in initial claims seen checked, but risks skewed to the upside


Today’s run of statistics ahead of the holiday break is all about the U.S., with no other significant items on the DM calendar elsewhere, though Mexico has monthly GDP and mid-month CPI, and eminently Brexit and pandemic related news will continue to rule the roost, along with US/China tensions. The US run includes Durable Goods, Personal Income/PCE, Weekly Jobless Claims, New Home Sales and FHFA House Prices. Trump’s threat to block the US stimulus bill has all the hallmarks of populism (he is in favour of a one off Payment of $2,000 as opposed to the bill’s $600, and wants cuts to envisaged foreign spending), but also of the scorched earth policy that has been so evident since the election. As for the continued impasse and brinkmanship on Brexit, there are no words to describe this abject display of infantile theatricality by politicians who clearly have no interest in public service, but only in the vanity of their careers. This is not a matter of principle, this is an outright deficit of diplomacy and negotiating skills, but in truth a reflection of the current Zeitgeist in the body politic across much of the world, where thought and intellect are sacrificed on the altar of vanity and machismo. At least some common sense has prevailed on re-opening cross-channel trade.


U.S.A. – Initial Claims, Nov Durable Goods and Personal Income/PCE

Durable Goods Orders are expected to be the only ray of sunshine in today’s run of data, even if the expected 0.5% m/m dip in New Home Sales would still leave these running at a very fast SAAR pace of 994K. The consensus looks for a 0.6% m/m rise in headline Durable Goods, but this looks to optimistic given Boeing Orders on net were down 61 on the month, even if core measures should be broadly in line with the consensus of 0.5%/0.6% m/m, given the order indications (both new and backlogs) from manufacturing surveys. Initial Claims are forecast to be little changed at 880K after surging ca. 170K over the past two weeks, though the risks would appear to be on the upside, both given activity restrictions as well as employers anticipating the expiry of the Paycheck Protection Programme (PPP), with Continued Claims also expected to rise 52K to 5.560 Mln (the reporting week being the same as for the monthly Payrolls survey). As is usual, expectations for Personal Income (-0.3% m/m) and PCE (-0.2% m/m) are effectively predicated by the labour report’s Average Hourly Earnings and Retail Sales, though the latter suggest that the PCE forecast may prove to be optimistic. But it is Personal Income which may post the bigger downside miss as a combination of a drop in Unemployment benefits (due to eligibility expiry), falling PPP payments to business owners and indeed a drop in farm incomes. Of course IF the fiscal package does get ratified by the president, then most of the latter factors should be at least partially reversed in Q1. As for final Michigan Sentiment, the steep fall in yesterday’s Consumer Confidence due to the slide in the present situation index (90.3 vs. 105.9) suggests the risk of a downward revision to the provisional reading that rebounded sharply to 81.4 from 76.9, though the two surveys have frequently been out of sync in month to month terms since the virus outbreak.



To view the full report and to sign up for daily market commentary please email

The information within this publication has been compiled for general purposes only. Although every attempt has been made to ensure the accuracy of the information, ADM Investor Services International Limited (ADMISI) assumes no responsibility for any errors or omissions and will not update it. The views in this publication reflect solely those of the authors and not necessarily those of ADMISI or its affiliated institutions. This publication and information herein should not be considered investment advice nor an offer to sell or an invitation to invest in any products mentioned by ADMISI.

© 2020 ADM Investor Services International Limited.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2024 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.