AU-JP-EZ-UK-US PMIs, UK Unemployment Rate.
Australia CPI, German IFO, BoC Policy Decision.
ECB Policy Decision, US Durable Goods, US GDP Q3, US Jobless Claims.
Tokyo CPI, Australia PPI, US Core PCE.
The ONS last week published
only the figures on the workers’ earnings, vacancies and real time information
on employment. The rest of the UK labour market data was pushed back to this
week due to falling response rates to the LFS survey. The consensus sees the
Unemployment Rate to remain unchanged at 4.3%.
the day we will get the PMIs for Australia, Japan, Eurozone, UK and the US. At
this point they are unlikely to influence the near-term policy outlook
as the central banks are expected to keep rates steady as they gather more data
and let the monetary policy lags filter through the economy. The market is more
likely to react to downside surprises given the recent rise in long-term
yields. The most important ones will be the Eurozone, the UK and especially the
- Eurozone Manufacturing PMI 43.7 vs. 43.4 prior.
- Eurozone Services PMI 48.7 vs. 48.7 prior.
- UK Manufacturing PMI 45.0 vs. 44.3 prior.
- UK Services PMI 49.5 vs. 49.3 prior.
- US Manufacturing PMI 49.5 vs. 49.8 prior.
- US Services PMI 49.9 vs. 50.1 prior.
Australian Q3 CPI Y/Y is expected at 5.3% vs. 6.0% prior, while the Q/Q reading
is seen at 1.1% vs. 0.8% prior. The RBA is more likely to focus on the core
measures with the Trimmed Mean CPI Q/Q expected at 1.1% vs. 0.9% prior and
the Y/Y reading seen at 5.0% vs. 5.9% prior, while the Weighted Mean CPI Q/Q
expected at 1.0% vs. 1.0% prior and the Y/Y figure seen at 5.0% vs. 5.5%
prior. The recent RBA Minutes were more
hawkish than expected and suggest that an upside surprise in the CPI data
could raise the chances of another rate hike.
The BoC is
expected to keep interest rates unchanged at 5.0% given the recent miss in the CPI report. In fact, prior
to that, there was a good chance that the BoC could have hiked by 25 bps as
the underlying inflation measures kept on surprising to the upside with wage
growth trending upwards. If the BoC decides to surprise with a rate hike, the
Canadian Dollar is likely to come under pressure after an initial spike.
The ECB is
expected to keep the deposit rate unchanged at 4.0% given several dovish
comments from ECB members, the miss in the Eurozone
CPI and the line in the September
Monetary Policy Statement saying that “the GC judges that rates have
reached levels that, maintained for a sufficiently long duration, will make a
substantial contribution to the timely return of inflation to target”.
Last week, the US
Initial Claims beat expectations once again, but Continuing Claims missed for
the second time in a row suggesting that workers are finding it harder to
get another job after being laid off. This week the consensus sees Initial
Claims at 209K vs. 198K prior, while Continuing Claims are expected at 1720K
vs. 1734K prior.
CPI is seen as a leading indicator for National CPI, and it’s been
consistently trending downwards, although the Core-Core measure looks
stickier. The consensus sees the Headline CPI Y/Y to tick lower to 2.7% vs.
2.8% prior, while the CPI ex-Fresh Food Y/Y is expected to remain unchanged at
The US PCE
Y/Y is expected to tick lower to 3.4% vs. 3.5% prior, while the M/M reading is
seen at 0.3% vs. 0.4% prior. The Core PCE Y/Y, which is the Fed’s preferred
measure of inflation, is expected at 3.4% vs. 3.5% prior, while the M/M figure
is seen at 0.3% vs. 0.1% prior. This report shouldn’t be market moving
given that it’s unlikely to change the near-term policy outlook and we recently
got the timelier CPI report.