The Week Ahead: UK inflation, Nvidia results, PMI data

Welcome to our pick of the top three market events to look out for in the week ahead, the biggest of which is arguably Nvidia’s third-quarter results. Will they set the tone for a solid year-end for the tech giants? Or will the last few weeks of 2024 see the market give back its hefty year-to-date gains? While the answer remains to be seen, these questions come as doubts swirl around the Trump administration's path on key geopolitical issues, which has sent US Treasury rates and the dollar soaring.

UK October CPI 

Wednesday 20 November
Despite a significant collapse in the pound versus the dollar, UK government bond rates have risen as investors look closely at new fiscal policy proposals. This could bring Wednesday’s inflation report under closer scrutiny, especially if it shows that consumer price growth accelerated in October. Analysts are forecasting that the consumer price index (CPI) rose 2.1% in the year to October, up from 1.7% in September. That implies that CPI rose 0.4% month-on-month, an uptick from the September reading which showed no increase on a monthly basis.

A rise in inflation could influence discussions at the Bank of England’s next interest rate meeting on 19 December. Policymakers’ decision could shape where GBP/USD goes next. The pound has fallen to a significant level of support around $1.26, where – at least for now – it has stabilised. Two trendlines are converging on this support zone: one is part of a downtrend from the July 2023 highs and the other is a horizontal line from August 2023. A break of support here could spell trouble for the pound, potentially resulting in a decline to around $1.228.

GBP/USD, March 2023 - present

Sources: Bloomberg, Michael Kramer

Nvidia Q3 results

Wednesday 20 November
Analysts estimate that Nvidia’s fiscal third-quarter 2025 revenue grew 83.2% from the year-ago period to $33.2bn, with earnings up a projected 83.8% at $0.74 a share. Data centre revenue growth, the most critical metric, is expected to have doubled to $29.1bn, while adjusted gross margins are anticipated to be 75%.

Looking ahead, the Nasdaq-listed company’s growth is expected to slow dramatically in the fourth quarter, with revenue predicted to rise 67.5% year-on-year to $37bn with earnings increasing 58.4% to $0.82 a share. Data centre revenue is projected to increase 79% to $32.9bn, while gross margins are expected to slip to 73.5%. 

Following the Q3 results announcement, the Nvidia share price – which closed at $146.76 on Thursday, up more than 200% year-to-date – is expected to rise or fall by 7.8% based on options pricing. Implied volatility for next week's expiration is around 75% and will likely increase as the earnings date approaches.

Nvidia stock has been in a rising wedge pattern, as shown on the chart below. However, trading volume has steadily decreased, a classic sign of a rising wedge nearing its end, especially when accompanied by a divergent relative strength index (RSI) as is the case here. This setup suggests that the market may be overly optimistic, with elevated implied volatility and options call positions heavily skewed towards the stock moving higher following the Q3 results.

However, it seems more probable the stock could break lower and look to fill a gap near $139. A break of support at $139 could signal a break in the rising wedge pattern, potentially resulting in the shares retracing to around $125 over time.

Nvidia share price, April 2024 - present

Sources: TradingView, Michael Kramer

US, UK October PMI data

Thursday 21 November (US) and Friday 22 November (UK)
Purchasing managers’ index (PMI) readings from both the US and the UK have highlighted weakness in their manufacturing sectors. The market will therefore be paying close attention to any details indicating that the sector is starting to show signs of improvement. The services sector, which has been in expansion territory for some time, essentially hold both economies together.

If the UK’s manufacturing PMI delivers a reading above 50, signalling that the sector is expanding, that could be a positive for the FTSE 100, which has moved sideways since April (one could even argue that it has been pretty stagnant since February 2023). The footsie has found some support around 8,000 – a level last seen on 5 and 6 August. If 8,000 holds, robust PMI data could help the share index to rally to around 8,200. Contrastingly, weak PMI data could result in the UK 100 breaking support and dropping to 7,900.

UK 100, October 2023 - present

Sources: Bloomberg, Michael Kramer

Key economic and company events

The coming week’s major economic announcements and scheduled US and UK company reports include:

Monday 18 November

• Eurozone: G20 meeting (runs until Tuesday)
• Results: Aecom (Q4), Diploma (FY)

Tuesday 19 November

• Australia: Reserve Bank of Australia meeting minutes
• Canada: October consumer price index (CPI)
• Results: Imperial Brands (FY), Lowe's (Q3), Medtronic (Q2), Walmart (Q3)

Wednesday 20 November

• China: People’s Bank of China interest rate decision
• UK: October CPI
• Results: Nvidia (Q3), Palo Alto Networks (Q1), Sage (FY), Snowflake (Q3), Target (Q3), TJX (Q3), Wix (Q3)

Thursday 21 November

• Japan: October CPI
• US: November flash purchasing managers’ index (PMI) data
• Results: Baidu (Q3), Intuit (Q1), Deere & Co (Q4), Gap (Q3), PDD Holdings (Q3), Ross Stores (Q3), Warner Music Group (Q4)

Friday 22 November

• Eurozone, France, Germany, UK: November flash PMI data
• UK: October retail sales
• Results: The Buckle (Q3)

Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.