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.
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.
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.
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.
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.
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.
ZEW expectations survey and KOF leading indicator are the only releases of note next week.
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.
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.
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.
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.
Saturday, Oct. 22
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
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
US Flash PMIs
Australia PMI data
European PMIs: France, Germany, UK
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
US Conference Board consumer confidence
Germany IFO business climate
Japan department store sales, machine tool orders
Mexico international reserves
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
US MBA mortgage applications, wholesale inventories, new home sales
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
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
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
Germany GDP, CPI
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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