Coming off an upbeat October that saw trade tensions between the US and China ease and a breakthrough in the years-long Brexit saga, November is shaping up as yet another busy month for financial markets. While global markets will again take their lead from the ongoing geopolitical issues, this month is set to be an important one in New Zealand with an interest rate cut on the cards and a raft of economic data.

Here’s what ANZ is watching out for this month.

The US and China could sign phase one of the trade deal

Trade tensions between the US and China eased in October and now optimism is building that phase one of a trade deal could be signed at the APEC meeting in Santiago, Chile, on 16-17 November. Given optimism around the deal, it is worth noting some of the aspects of the deal.

1. A pause in some tariff escalation: If a deal is struck, it is likely to see the US drop the
   $160 billion in goods it has threatened to tariff beginning 15 December. These tariffs include consumer items such as smartphones and toys.
2. Currency concessions: The deal will see the US lift the “currency manipulator” tag it placed on China.
3. An increase in agriculture purchases: The deal will see China increase its soybean and pork purchases from the US. The farming sector is an important constituency to President Trump ahead of the 2020 election.
4. The deal will not include any concessions by the US on Huawei. The telecommunications company is blacklisted by the US, restricting its capacity to work with American companies.

What direction will Brexit take?

The first decisive breakthrough in the years-long saga came when the European Union agreed to the Brexit deal tabled by UK Prime Minister Boris Johnson. However, this deal was rejected by the British Parliament and, as the deadline neared, the EU granted a further extension to 31 January 2020.