In the traditionally quiet post-payrolls week, attention will focus on the US CPI report, retail sales and FOMC minutes as well as the Catalonia vote and Eurozone industrial production. Separately, we have UK construction, Chinese PMIs, Japanese BoP and inflation in the Scandies.
A breakdown of the key events this week from BofA:
FOMC minutes and CPI in the US
This week, the FOMC releases minutes from their September 20 meeting. Focus is on future hikes and recent low inflation. On Friday we have CPI, retail sales and U. of Michigan Sentiment. Our economists expect CPI to rise to 0.6% m/m in September due to an increase in gasoline prices and core CPI to remain unchanged at 0.2% m/m.
A key week for Catalonia
The Catalan parliament meets early this week to discuss secession. If they declare independence, the Spanish government could take control of the region. Our economists note that escalation could negatively impact Spain’s economic recovery, as Catalonia makes up 20% of the Spanish economy. Internal division in the secessionist movement and their thin majority in the Catalan parliament provide hope for de-escalation.
Watch for industrial production for Europe and UK
Industrial production growth releases for Germany, France and Italy early in the week. Our economists expect growth down to 2.0% y/y from 4.0% in Germany and a slight decrease to 3.0% y/y for the Euro area. In the UK we expect industrial production growth at 0.5% y/y. Final CPI will be released in Spain, France and Germany later in the week.
The week ahead in Emerging Markets
There will be monetary policy meetings in Peru, Singapore and Kazakhstan. Inflation releases in Brazil and Mexico. Current account data in Russia and Turkey.
Next, courtesy of DB’s Jim Reid, here is a breakdown of the key global daily events in the coming week:
Monday: In what is a fairly light day for data, we start with the Industrial production in Germany for August, follow by the September Bank of France business sentiment reading and October Sentix investor confidence reading for the Eurozone. It’s worth noting that the fifth round of Brexit talks between the UK and EU also start on Monday while the ECB’s Mersch and Lautenschlaeger are scheduled to speak. There is no data in the US due. The Columbus Day holiday means the Treasury market will close but stock exchanges remain open.
Tuesday: A fairly busy day, particularly in Europe. Overnight though we are due get comments from the BoJ’s Kuroda. Following that the most significant releases in Europe include the August industrial production prints for France, Italy and the UK along with August trade data for Germany and the UK. The only reading due in the US is the September NFIB small business optimism print. The Fed’s Kashkariis also scheduled to speak midway through the afternoon. The IMF and World Bank annual meetings also start today and run through to Saturday.
Wednesday: Overnight the main focus will likely be on comments from the Fed’s Kaplan, while China’s Xi Jingping is also due to deliver a communique following the meeting of the Chinese Communist Party. In Europe the final September CPI revisions for Spain are due. The UK’s Philip Hammond will face questions in the House of Commons, including on Brexit related issues. Across the pond the big focus in the evening in the US will be the FOMC meeting minutes from the September meeting. Datawise we’ll receive August JOLTS data prior to this, while the Fed’s Evans and Williams are both due to speak later on. The ECB’s Praet is also due to deliver comments in the evening.
Thursday: Overnight, RICS house price data in the UK and PPI data out of Japan will be out. In France we’ll receive the final September CPI revisions, while Eurozone industrial production data for August will be out. The BoE will also release the latest credit conditions and bank liabilities surveys mid-morning. In the US the big focus on Thursday will be the September PPI report, while the latest weekly initial jobless claims will also be released. Thursday is also a busy day for speakers with the ECB’s Draghi and Fed’s Brainard due to take part in a monetary policy panel in the afternoon, while the Fed’s Powell will speak shortly after at a conference in Washington. President Trump is also tentatively scheduled to give a speech on US policy towards Iran. Earnings season also gathers pace with JP Morgan and Citi scheduled to report.
Friday: We end the week with a bit of a bang on Friday. Overnight the September trade numbers out of China will be released. That’s before we get the final September CPI revisions for Germany and Italy. In the US it’s all eyes on the September CPI report, while last month’s retail sales numbers are also worth keeping a close eye on. The preliminary October University of Michigan consumer sentiment reading will also be out along with August business inventories data. Not to be outdone, the Fed’s Evans, Kaplan and Powell are all on the cards to speak on Friday. Bank of America also reports earnings.
