A heavy week which kicks off with the UK budget announcement on Monday and extends to the Bank of England’s policy meeting on Thursday, while in the Eurozone the focus will be on preliminary October CPI-inflation and Q3 GDP data.
In the US, the attention grabber as always will be Friday’s labour market data but beforehand the US will release the important PCE inflation and ISM manufacturing numbers.
On the other side of the pond, Australia will be releasing private sector credit, inflation, trade and retail sales numbers which should put in focus how fast the domestic economy is growing.
Monday 29th October
United Kingdom: Chancellor of the Exchequer Philip Hammond to present annual budget. Chancellor has been under pressure to reverse the Conservative government’s austerity measures but his head-room is limited by the need to plan for a no-deal Brexit and modest UK economic growth.
United States: Personal income, spending and price index (September). The important core PCE price inflation index, which the Federal Reserve tracks closely, is forecast to have remain unchanged at 2.0% yoy for the second consecutive month. This would raise further questions about the need for the Fed to be (or sound) as hawkish as it has done in recent weeks.
United States: FOMC member Evans to speak
Tuesday 30th October
Australia: RBA Assistant Governor Bullock to speak
Eurozone: Q3 GDP (preliminary). Eurozone GDP growth averaged 0.4% qoq in the first half of the year
Wednesday 31st October
New Zealand: ANZ business confidence (October).
Australia: CPI-inflation (Q3). The Reserve Bank of Australia has not turned more hawkish partly because inflationary pressures in Australia have remained modest, with headline CPI-inflation hitting just 0.4% qoq in both Q1 and Q2. The consensus forecast is that this did not change in Q3, which could disappoint markets (and in particular Australian Dollar bulls) looking for signs that a strong labour market is finally feeding through to wage and price inflation.
Australia: Private sector credit (September). A volatile and somewhat volatile series but with concerns lingering about the robustness of the Australian housing market a further pick-up in the monthly growth rate from 0.5% in August and an average of 0.3% mom in May-July would likely not do the Dollar any harm.
Eurozone: CPI-inflation (October, preliminary data). Headline CPI-inflation has increased at a glacial pace, from 1.9% yoy in May to 2.1% yoy in September, while core CPI-inflation is at the lower end of a narrow range of 0.9-1.1% yoy in place since May. Tepid inflation, alongside modest (and seemingly slowing) Eurozone growth has not stopped the ECB from tapering its QE program but has stopped it from expecting rates hikes this side of summer 2019. This conservative stance has arguably not helped a depreciating Euro and analysts forecast that headline CPI-inflation only inched up to 2.2% yoy in October.
United States: ADP private sector employment (October).
Thursday 1st November
Australia: Trade balance (September)
Switzerland: CPI-inflation (October). Headline CPI-inflation likely remained near 1% yoy in October, a paltry rate of inflation which has anchored the Swiss National Bank’s view that there is no case for a rate hike. This has not stopped the safe-haven Swiss Franc from slowly appreciating.
United Kingdom: Manufacturing PMI (October). This index has slowly eroded since the beginning of the year and analysts expect the modest rebound in September to have been erased in October. In any case this data release is likely to have only a modest and transitory impact on Sterling because manufacturing accounts for only small share of UK economy and markets will be focused on the Bank of England policy meeting and perhaps even more importantly on Brexit.
United Kingdom: Bank of England MPC meeting. The Monetary Policy Council will in all likelihood keep its policy rate unchanged at 0.75% until there is greater clarity about Brexit. So the focus at this meeting will be the MPC’s view about the pick-up in UK economic growth alongside falling inflation and Governor Carney’s take on the latest Brexit developments.
United States: ISM manufacturing Purchasing Managers Index (October). This index will provide the first glimpse of how the US manufacturing sector fared in early Q4.
Friday 2nd November
Australia: Retail sales (September)
United States: Labour market data (October). Consensus forecast is that US economy continued to generate new jobs at a decent clip of +190,000 and that the unemployment rate stayed at its record low of 3.7%. The pace of wage growth, which has picked up recent months, will if anything be even more telling about the strength of the US labour market and the possibility of US inflation rising more forcefully.
United States: Trade balance (September)
