Week Ahead – Big tech earnings eyed

US

Wall Street will pay close attention to the first look at third-quarter GDP. After two consecutive quarters of negative readings, growth is expected to bounce back into expansion territory with a 2.3% reading. The consensus range for third-quarter GDP is between 1.1% and 3.0%. The October flash PMIs will also closely be watched, with manufacturing activity expected to edge lower but still remain in expansion territory. Service sector activity is expected to tick higher but still remain entrenched in contraction territory.  

Peak earnings are here and everyone will want to see how mega-cap tech performs and what the oil giants will say about their future CAPEX plans. Attention on Thursday will be on Apple and Amazon’s quarterly results. Oil giants, Exxon and Chevron report before Friday’s opening bell.  This is the critical week for guidance from mega-cap tech that will either make or break risk appetite.  

EU

The headline event next week will be the ECB meeting on Thursday when the central bank is widely expected to hike rates by 75 basis points. The question is how much further will they go? Markets are pricing in another 75 basis points over the course of the following two meetings and then 25 after that for two meetings. That would leave rates well below what we’re seeing elsewhere which is interesting when inflation is close to 10% and has been rising. 

President Christine Lagarde also makes an appearance on Saturday, ahead of next week’s decision. PMIs on Monday get the week off to a fast start, with GDP and inflation seeing us into the weekend.

UK

A new week will bring a new Prime Minister in the UK, the third in two months, following the resignation of Liz Truss. Of course, if Boris wins then it will technically be two Prime Ministers. It would also nicely sum up the mess that is British politics right now that the man removed from office by his own party could be welcomed back so quickly. The first step is MPs giving their backing to candidates, with the threshold this time being 100 votes in order to speed up the process. In theory, we could have a winner by Monday but if it goes to the membership, it will be Friday.

PMIs on Monday may also be of interest among all of the drama.

Russia

The CBR is expected to leave interest rates unchanged on Friday at 7.5% following a cycle of easing that’s seen the Key Rate fall from a peak of 20% in March.

South Africa

Finance Minister Enoch Godongwana will deliver the medium-term budget policy statement on Wednesday which provides economic forecasts, budget updates and any changes to spending. 

PPI inflation data will also be released on Thursday.

Turkey

The CBRT will release its quarterly inflation report on Thursday which will no doubt be an interesting read. Official inflation above 80% in the midst of another aggressive easing cycle, the last rate cut being 1.5%, doesn’t suggest there’ll be many lessons learned. The CBRT also signalled another could follow at the next meeting, taking the rate to 9%, before it pauses again. 

Switzerland

ZEW expectations survey and KOF leading indicator are the only releases of note next week.

China

The conclusion of China’s Party Congress will likely be followed up with the delayed release of GDP and activity data.  The economy was losing steam battling strict anti-COVID measures and a deflated real estate sector.  This year’s GDP reading could be the second slowest year of growth since 1976.  The September retail sales and export data are also expected to show a significant deceleration.   

India

No major economic releases or speeches are expected.

Australia & New Zealand

The focus for Australia will be both on the delayed release of key Chinese activity data and the RBA’s preferred inflation gauge. Core inflation could hit a 31-year high and that could bolster the RBA to deliver another large rate hike.   

In New Zealand, traders will also closely watch the swathe of Chinese economic data and a couple of key confidence reports.  On Tuesday, the  ANZ Business Confidence report is published and Thursday contains the consumer confidence readings.  

Japan

The Bank of Japan is not expected to deliver any changes to its ultra-low interest rate and asset purchases. It will be hard to continue to maintain this dovish stance as inflation is above their target. A suspected intervention on Friday came following days of warnings from the Finance Ministry. How successful will this one be? The previous attempt didn’t hold off the yen bears for long.

Singapore

On Tuesday, September inflation is expected to remain hot but tick lower to 7.4%. Inflation is expected to remain high well into next year and that should keep the MAS in tightening mode. 

Economic Calendar

Saturday, Oct. 22

Economic Data/Events

China’s Party Congress ends

BOE MPC member Mann speaks at a Marshall Society Speaker event in Cambridge

ECB President Lagarde participates in the “Mein Leiblingstuck” event at the Alte Oper Frankfurt

Sunday, Oct. 23

Economic Events

Japan PM Kishida meets his Australian counterpart, Anthony Albanese, in Perth to discuss security issues and other regional concerns

French President Macron meets with Italian President Mattarella in Rome

Monday, Oct. 24

Economic Data/Events

US Flash PMIs

Australia PMI data

European PMIs: France, Germany, UK

Japan PMIs

Mexico bi-weekly CPI

German Chancellor Scholz holds a forum with Ukrainian President Volodymyr Zelenskiy

RBA’s Kent addresses the Commonwealth Bank Global Markets Conference in Sydney

Tuesday, Oct. 25

Economic Data/Events

US Conference Board consumer confidence

Germany IFO business climate

Japan department store sales, machine tool orders

Mexico international reserves

Singapore CPI

Thailand trade

BOE Chief Economist Pill speaks at an Office for National Statistics event titled “Understanding the Cost of Living Through Statistics”

European Union and G7 nations hold a Ukraine reconstruction conference

Australian PM Albanese’s government presents its first budget

The IEA holds a meeting of ministers responsible for nuclear energy in Washington

Wednesday, Oct. 26

Economic Data/Events

US MBA mortgage applications, wholesale inventories, new home sales

Australia CPI

BOC rate decision: Expected to raise rates by 0.5%

France consumer confidence

Japan PPI, leading index

New Zealand business confidence

Russia industrial production

Singapore industrial production

The BOJ is expected to announce the outright purchase amount of government securities

EIA crude oil inventory report

Thursday, Oct. 27

Economic Data/Events

US GDP, durable goods orders, initial jobless claims

ECB rate decision: Expected to raise rates by 75bps

Australia export/import price index

China industrial profits

Mexico trade, unemployment

Russia gold and forex reserves

Mega-cap tech earnings from Apple and Amazon

BOE Deputy Governor Woods speaks at Mansion House

Germany Chancellor Scholz holds talks with Greek Prime Minister Kyriakos Mitsotakis in Athens.

Friday, Oct. 28

Economic Data/Events

US personal income, personal spending, pending home sales, University of Michigan consumer sentiment

BOJ Rate Decision: No change expected with the 10-year target and policy bank rate

France CPI

Germany GDP, CPI

Canada GDP 

Australia PPI

Eurozone economic confidence, consumer confidence

Japan Tokyo CPI, unemployment

New Zealand consumer confidence

Russia rate decision

Singapore unemployment, home prices

Thailand foreign reserves, forward contracts

Key earnings from Exxon and Chevron

Deadline for the Northern Ireland government to be restored, or the UK Secretary of State for Northern Ireland Heaton-Harris will call an election

Sovereign Rating Updates

– Portugal (Fitch)

– Sweden (S&P)

– Finland (S&P)

– Poland (Moody’s)

– Italy (DBRS)

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