This week will be massive for markets as investors closely watch to see how inflation moderates. In addition to watching to see if inflation comes down from a 40-year high, Wall Street will pay close attention to the midterm elections. Right now polls are suggesting Republicans have a good chance to take over both the House and Senate.
In addition to the inflation report and the midterm election, traders will also closely monitor the preliminary University of Michigan Survey. Sentiment is expected to soften, but traders will pay close attention to inflation expectations, which have been pushing higher.
EU
A quiet week as far as upper-tier economic data is concerned which means the focus next week will be on commentary from ECB policymakers including President Lagarde on Monday, among others.
The dust continues to settle in the UK but as BoE Governor Bailey indicated last week, it’s going to take time to regain confidence and credibility in the markets. The events of the last couple of months have severely damaged the UK’s reputation which was already tarnished by those of recent years. All eyes are now on the Autumn Statement on 17 November.
We’ll get a steady stream of BoE commentary throughout the week which comes on the back of a very dovish rate hike, in which Bailey and colleagues pushed back strongly against market expectations. GDP data on Friday will be of interest but most have already accepted that the country is in recession.
Russia
Inflation data is the most notable release next week after the central bank left its key rate unchanged at 7.5% in October.
South Africa
A relatively quiet week containing a few tier two or three economic releases, the highlight of which is probably manufacturing production figures on Thursday, both of which are expected to have declined in September.
Turkey
Official inflation reached more than 85% in October as the central bank continues to slash interest rates. The inflation data is clearly no deterrent and if anything, President Erdogan sounds more determined than ever to see rates fall further.
Industrial production and unemployment data among the economic releases next week.
Switzerland
Inflationary pressures eased a little last month which may come as a relief to SNB policymakers, some of whom we’ll hear from next week including Chairman Jordan. Further hikes still look likely but to what extent? Policymakers may shed some light.
China
As China’s zero-Covid policy continues, the recently released manufacturing and non-manufacturing PMIs for October fell to 48.7 and 49.2, respectively, below the 50 threshold separating contraction from expansion.
Investors should pay close attention to China’s foreign trade data for October on Monday to see if China’s trade surplus is tending to deteriorate. The CPI on Wednesday is also key as an increase will reduce the ability of the PBOC to support the economy.
The market is currently discussing the possibility of the PBOC lowering the reserve requirement ratio again in order to release more liquidity. These policies may support a more accommodative monetary policy environment in China, which will support growth.
India
Very few economic releases are due next week with the only one of note being industrial output on Friday.
Australia & New Zealand
The AUDUSD and NZDUSD have rallied slightly as market risk sentiment has warmed over the past two weeks. They’ve been broadly weak overall against the US dollar as China’s zero-Covid policy continued, and the market was still digesting the Fed rate moves.
The RBA raised interest rates by 25 bps at its monetary policy meeting on 1 November, raising the cash rate from 2.60% to 2.85%. The RBA updated its forecasts, raising its expectation for peak inflation to 8.0% from 7.75%. Third quarter CPI released last week rose by 7.3% in October, above market expectations of 7.0% and the previous value of 6.1%. The RBA is likely to continue its policy of raising interest rates at the next meeting on 6 December.
As the overall level of inflation in New Zealand remains high, the market expects a 50-75 bps rate hike at the RBNZ’s next central bank rate meeting on 23 November.
The Bank of Japan remained committed to its super-loose monetary policy at its last meeting while raising inflation expectations across the board (the CPI ex-fresh food forecast for FY2023 was raised from 1.4% to 1.6% per annum). It will release its summary of opinions from board members on Monday.
Japan may intervene again in the FX market in the coming weeks if USDJPY continues to aggressively rally. There has been discussion in the market about whether the Bank of Japan will undertake a step-by-step exit from its yield curve control (YCC) in the future, although policymakers have pushed back against this.
Singapore
According to the Monetary Authority of Singapore, core inflation risks remain tilted to the upside, and the economy is expected to grow at a below-trend rate in 2023. Singapore’s CPI recently hit 7.5% in September, with the core CPI at 5.3%. Business confidence also fell sharply to -20 in the third quarter, compared to -8 previously.
No major economic releases are due next week.
Economic Calendar
Saturday, Nov. 5
Economic Events
- Berkshire Hathaway Inc reports Q3 earnings
Sunday, Nov. 6
Economic Events
- Daylight Saving Time ends in the US
- The annual UN climate summit, COP27 begins in Egypt
Monday, Nov. 7
Economic Data/Events
- Australian Foreign reserves
- China foreign reserves and trade
- Singapore foreign reserves
- Germany industrial production
- Thailand CPI
- ECB President Lagarde speaks to the European Commission/ECB high-level conference on the framework for a digital euro
- ECB board member Panetta participates in a panel discussion at the same event
- Fed’s Collins and Mester speak at a symposium on women in economics hosted by the Cleveland Fed
- Fed’s Barkin participates in a discussion about inflation
- Eurozone finance ministers meet in Brussels
Tuesday, Nov. 8
Economic Data/Events
- US midterm elections
- Australia consumer confidence, household spending
- Eurozone retail sales
- France trade
- Japan household spending, leading index
- Mexico international reserves
- New Zealand truckometer traffic index, inflation expectation
- Bundesbank symposium; speeches by Nagel and Enria
- Riksbank’s Breman speaks about the global economy
- ECB’s Wunsch gives a public lecture in Geneva entitled “Germs, War and Central Banks”
- BOE’s Mann participates in a panel at a conference on global risk, uncertainty and volatility hosted by the Swiss National Bank, Fed and BIS in Zurich
- BOE Chief Economist Pill participates in a panel at the UBS European Conference in London
- BOJ announces the outright purchase amount of government securities
Wednesday, Nov. 9
Economic Data/Events
- US wholesale inventories, MBA mortgage applications
- Mexico CPI
- Hungary CPI
- Russia CPI
- China aggregate financing, PPI, CPI, money supply, new yuan loans
- Japan BoP, bank lending
- New Zealand card spending
- Poland rate decision: Expected to keep base rate unchanged at 6.75%
- South Korea jobless rate, bank lending to households
- UK RICS home prices
- EIA crude oil inventory
- New York Fed President John Williams speaks at a conference on global risk, uncertainty and volatility jointly hosted by the Swiss National Bank, Fed and BIS in Zurich
- Fed’s Barkin speaks about the economic outlook at the Shenandoah University School of Business in Winchester, Virginia
- RBA Deputy Governor Michele Bullock speaks at the 2022 ABE Annual Dinner in Sydney
- ECB’s Elderson participates in a panel at an event organized by Euro-Mediterranean Economists Association
- Norges Bank and Riksbank release their respective financial stability reports
- BOE’s Haskel speaks at a Digital Futures at Work Research Centre event titled “Restarting the Future: How to Fix the Intangible Economy”
- Hong Kong Chief Executive Lee is scheduled to address a British Chamber of Commerce-organized webinar
Thursday, Nov. 10
Economic Data/Events
- US CPI and jobless claims
- Norway CPI
- Australia consumer inflation expectations
- Italy industrial production
- Japan money stock, machine tool orders
- Mexico rate decision: Expected to raise the overnight rate by 75bps to 10.00%
- New Zealand home sales
- South Africa manufacturing production
- Thailand consumer confidence
- Dallas Fed President Logan and Kansas City Fed President George speak at an energy and economy conference jointly hosted by their banks
- Cleveland Fed President Mester speaks about the outlook for the economy and monetary policy at a virtual event hosted by Princeton University
- BOE Deputy Governor Ramsden participates in a panel at the Next STEP Global Conference 2022 hosted by PIIE and National University of Singapore’s Lee Kuan Yew School of Public Policy in Singapore
- BOE’s Tenreyro delivers a keynote speech at the Society of Professional Economists Annual Conference in London
- SNB’s Maechler delivers keynote speech at the 17th Annual Meeting of SFI in Zurich
- ECB’s Schnabel, Kažimír and Vasle speak at an event in Ljubljana, Slovenia. Schnabel also participates in a roundtable discussion at the Bank of Slovenia
- ECB publishes its Economic Bulletin
- RBNZ releases a review of monetary policy implementation
- United Nations publishes its “Food Outlook” report
Friday, Nov. 11
Economic Data/Events
- US Veterans Day holiday. The stock market will be open
- US University of Michigan consumer sentiment
- China FDI
- Singles’ Day (Shopping event) in China
- ECB’s Panetta delivers a talk at the Italian Institute for International Political Studies in Milan
- ECB’s de Guindos, Pablo Hernández de Cos and Centeno speak at XXVII Encuentro de Economía en S’Agaró
- ECB’s Holzmann speaks to journalists at the Club of Economic Writers in Vienna
- ECB Chief Economist Lane participates in a policy panel at the 23rd Jacques Polak Annual Research Conference in Washington
- EU releases its autumn economic forecast
- Germany CPI
- Hong Kong GDP
- India industrial production
- Japan PPI
- Mexico industrial production
- New Zealand food prices, PMI
- Turkey industrial production, current account
- UK industrial production, GDP
Sovereign Rating Updates
- Switzerland (Fitch)
- Iceland (S&P)
