UPCOMING EVENTS:
- Monday: Japan Industrial Production, NZ CPI, PBoC MLF.
- Tuesday: RBA Meeting Minutes, UK Jobs report, German ZEW, Canada CPI, US Retail Sales, US Manufacturing Production, US NAHB Housing Market Index.
- Wednesday: China GDP, China Industrial Production, China Retail Sales, China Unemployment Rate, UK CPI and PPI, US Housing Starts and Building Permits.
- Thursday: Australia Jobs report, US Jobless Claims, Fed Chair Powell speaks.
- Friday: Japan CPI, PBoC LPR, UK Retail Sales, Canada Retail Sales.
Monday
The New Zealand CPI Y/Y is expected to
tick lower to 5.9% vs. 6.0% prior, while the Q/Q figure is seen at 2.0% vs.
1.1% prior. The elevated inflation rate is mainly due to the sharp rise in fuel
prices. Unless we get a big upside surprise, the RBNZ is unlikely to respond
with another rate hike as it has stated that it’s ready to look through the
short-term “noise”.
New Zealand CPI YoY
The PBoC is likely to keep the MLF and LPR
rates unchanged on Monday and Friday respectively as the economic outlook has
started to improve a little as seen with the latest PMI
figures. On the other hand, the inflation
figures last week disappointed, which might
give them space to go for another rate cut, although the monthly reading has
been positive for the last 3 months.
PBoC
Tuesday
The UK employment change is expected at
-195K vs. -207K prior and the unemployment rate to remain unchanged at 4.3%.
The average earnings excluding bonus are seen at 7.8% vs. 7.8% prior, while the
average earnings including bonus are expected at 8.3% vs. 8.5% prior. The
BoE has paused at the last meeting and, as Governor
Bailey has stated recently,
“future decisions are going to be tight”,
so strong readings might lead to another rate hike at the upcoming meeting,
especially if the inflation data surprises to the upside later in the week.
UK Unemployment Rate
The Canadian CPI Y/Y is expected at 4.0%
vs. 4.0% prior, while the M/M figure is seen at 0.1% vs. 0.4% prior. There’s no
consensus at the moment for the Core measures, although those are the ones
that the BoC will look at to decide what to do at the next week’s meeting. As
a reminder, underlying inflation has been surprising to the upside and that’s
what is likely
to trigger another rate hike
from the BoC if this week’s figures remain elevated.
Canada Inflation Measures
The US Retail Sales M/M are expected to
rise 0.3% vs. 0.6% prior, while the Core measure is seen at 0.2% vs. 0.6%
prior. Watch out for the Control Group, which is seen as the best gauge of
consumer spending. This report is unlikely to change anything for the Fed as
the central bank is expected to keep rates unchanged at the November decision
as well.
US Retail Sales YoY
Wednesday
The UK CPI Y/Y is expected at 6.5% vs.
6.7% prior, while the M/M figure is seen at 0.4% vs. 0.3% prior. The Core CPI
Y/Y is expected at 6.0% vs. 6.2% prior, while there’s no consensus at the
moment for the monthly rate. The BoE is likely to look through an upside
surprise in the inflation data if the labour market report shows weakness.
On the other hand, if both the reports show strength, then we are likely to see
another rate hike at the upcoming meeting.
UK Core CPI YoY
Thursday
The US Jobless Claims have been showing
strength for several weeks. Last
week though, we got a miss in Continuing
Claims, which measures ongoing unemployment benefits and can be viewed as an
indicator of how easily workers can find another job after getting unemployed. It
could be something or it could be nothing, but it’s certainly worth to keep an
eye on. This week the consensus sees Initial Claims at 213K vs. 209K prior,
while there’s no consensus on Continuing Claims at the time of writing.
US Jobless Claims
Friday
The Japanese Core CPI Y/Y is expected at
2.7% vs. 3.1% prior, while there’s no consensus at the moment for the Core-Core
figure and the Headline CPI, which were previously 4.3% and 3.2% respectively.
The Tokyo CPI, which is seen as a leading indicator for national CPI,
disappointed recently and, although the BoJ
is going to revise its inflation forecasts higher,
they are unlikely to normalise their monetary policy unless they see
sustained wage growth or big upside surprises in the inflation data.
Japan Core-Core CPI YoY