A Week of Key Events: Retail Sales, ECB, Fed Speakers, and a Flood of Earnings
The week begins with a partial US holiday, Columbus Day, which sees bond markets closed while equity markets remain open. The main news over the weekend came from China, where the Ministry of Finance's highly anticipated press conference on Saturday was light on specifics regarding immediate stimulus measures. However, it did include a "strong forward commitment" and the announcement of a large-scale local government debt swap, which suggests a potential multi-year turning point in China's fiscal policy framework. Both DB and Goldman have raised their 2024 GDP forecast to 4.9% (from 4.7%), based on already announced measures and are expecting more concrete measures to be announced at the upcoming NPCSC in late October.
Weekend data showed that China’s September CPI rose by +0.4% year-on-year, the slowest in three months, compared to a +0.6% rise in August and below market expectations of a +0.6% increase. PPI fell by -2.8% year-on-year, the fastest decline in six months, compared to a -1.8% drop in the previous month and below the expected -2.6% decline. Despite weaker prices than expected, markets should be comfortable excusing recent data due to the subsequent stimulus announcement.
Key Events This Week
The key events this week will likely be on Thursday with US retail sales and jobless claims, alongside the latest ECB meeting. The US earnings season also starts to accelerate after last Friday's unofficial start, and there are plenty of central bank speakers to digest as well. Other global highlights this week include the NY Fed 1yr inflation expectations, UK employment, German/European ZEW survey, ECB bank lending survey, Eurozone IP, and Canadian CPI.
In terms of Fed speeches, Waller's speech may be the most interesting given his traditionally hawkish stance and his voting status. In his last outing, Waller suggested that another 50bp reduction in an upcoming meeting was a possibility if the labor market weakened further or if inflation continued to come in softer than expected. Since then the opposite has seemingly occurred, so will he revert back to more hawkish form?
Thursday's September US retail sales will be a swing factor in final Q3 GDP forecasts, but jobless claims could spike significantly higher (DB forecast 270k vs. 258k last week) and to 3-year highs due to the latest storm. The impact of the storm will also feed into this month's payroll data, making it difficult to assess employment trends in the next several weeks.
The ECB Decision
In Europe, the highlight of the week will be the ECB decision on Thursday. DB economists expect a 25bps rate cut following recent lower-than-expected inflation prints as well as weaker growth. The central bank will also release its bank lending survey on Tuesday and the survey of professional forecasters on Friday. The lending survey is a good gauge to see whether we're past the peak impact of the monetary transmission mechanism. In recent quarterly surveys, lending has improved with future expectations improving too.
Earnings Season
In terms of earnings, we'll start to see some momentum with the highlights including key semiconductor firms TSMC and ASML. US bank results will continue to come in with Bank of America, Citigroup, and Goldman Sachs as the highlights, alongside large-cap healthcare names including UnitedHealth, Johnson & Johnson, and Abbott. Other notable names include Netflix and Blackstone on Thursday and Procter & Gamble on Friday.
Bottom Line
The week ahead is filled with key events that could significantly impact the financial markets. From retail sales and jobless claims in the US to the ECB decision in Europe, each event could potentially shift the economic landscape. As we navigate through this week, it will be interesting to see how these events unfold and what impact they will have on the global economy. What are your thoughts on this? Feel free to share this article with your friends and discuss. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.
A Week of Key Events: Retail Sales, ECB, Fed Speakers, and a Flood of Earnings
The week begins with a partial US holiday, Columbus Day, which sees bond markets closed while equity markets remain open. The main news over the weekend came from China, where the Ministry of Finance's highly anticipated press conference on Saturday was light on specifics regarding immediate stimulus measures. However, it did include a "strong forward commitment" and the announcement of a large-scale local government debt swap, which suggests a potential multi-year turning point in China's fiscal policy framework. Both DB and Goldman have raised their 2024 GDP forecast to 4.9% (from 4.7%), based on already announced measures and are expecting more concrete measures to be announced at the upcoming NPCSC in late October.
Weekend data showed that China’s September CPI rose by +0.4% year-on-year, the slowest in three months, compared to a +0.6% rise in August and below market expectations of a +0.6% increase. PPI fell by -2.8% year-on-year, the fastest decline in six months, compared to a -1.8% drop in the previous month and below the expected -2.6% decline. Despite weaker prices than expected, markets should be comfortable excusing recent data due to the subsequent stimulus announcement.
Key Events This Week
The key events this week will likely be on Thursday with US retail sales and jobless claims, alongside the latest ECB meeting. The US earnings season also starts to accelerate after last Friday's unofficial start, and there are plenty of central bank speakers to digest as well. Other global highlights this week include the NY Fed 1yr inflation expectations, UK employment, German/European ZEW survey, ECB bank lending survey, Eurozone IP, and Canadian CPI.
In terms of Fed speeches, Waller's speech may be the most interesting given his traditionally hawkish stance and his voting status. In his last outing, Waller suggested that another 50bp reduction in an upcoming meeting was a possibility if the labor market weakened further or if inflation continued to come in softer than expected. Since then the opposite has seemingly occurred, so will he revert back to more hawkish form?
Thursday's September US retail sales will be a swing factor in final Q3 GDP forecasts, but jobless claims could spike significantly higher (DB forecast 270k vs. 258k last week) and to 3-year highs due to the latest storm. The impact of the storm will also feed into this month's payroll data, making it difficult to assess employment trends in the next several weeks.
The ECB Decision
In Europe, the highlight of the week will be the ECB decision on Thursday. DB economists expect a 25bps rate cut following recent lower-than-expected inflation prints as well as weaker growth. The central bank will also release its bank lending survey on Tuesday and the survey of professional forecasters on Friday. The lending survey is a good gauge to see whether we're past the peak impact of the monetary transmission mechanism. In recent quarterly surveys, lending has improved with future expectations improving too.
Earnings Season
In terms of earnings, we'll start to see some momentum with the highlights including key semiconductor firms TSMC and ASML. US bank results will continue to come in with Bank of America, Citigroup, and Goldman Sachs as the highlights, alongside large-cap healthcare names including UnitedHealth, Johnson & Johnson, and Abbott. Other notable names include Netflix and Blackstone on Thursday and Procter & Gamble on Friday.
Bottom Line
The week ahead is filled with key events that could significantly impact the financial markets. From retail sales and jobless claims in the US to the ECB decision in Europe, each event could potentially shift the economic landscape. As we navigate through this week, it will be interesting to see how these events unfold and what impact they will have on the global economy. What are your thoughts on this? Feel free to share this article with your friends and discuss. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.
