Ostwald, Marc
09:00 (47 minutes ago)
to Marc
- Very busy day for data and events, but likely to be subdued due to month
and quarter end; digesting raft of Japan data and Sept summary of BoJ
opinions, awaiting UK Current Account, Eurozone CPI, US Personal Income
& PCE and Chicago PMI, Canada monthly GDP; ECB, BOE & Fed speakers;
Italy Budget sends shockwaves; Colombia set to hold rates
- Eurozone CPI: slightly weaker than expected French and Spanish data
unlikely to offset much stronger than expected German HICP
- US Personal Income / PCE: expected to mirror Average Hourly Earnings
and Retail Sales; Chicago PMI seen dipping further, but still strong
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** EVENTS PREVIEW **
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As Q3 draws to a close, there is a deluge of data, quite a number of ECB, BOE & Fed speakers, as well as a rate decision in Colombia, with Bancolombia expected to leave rates unchanged at 4.50%, with inflation falling, and the COP standing out as a haven of stability amid the EM related turmoil in many Latin American currencies. In terms of the data run, there are the overnight deluge from Japan - Tokyo CPI, Unemployment, Industrial Production & Retail Sales and Sept BoJ 'summary of opinions' - to digest along with the UK GfK Consumer Confidenceto digest. Ahead lie Eurozone and national CPIs, UK Q2 Current Account, South African Trade Balance, German Unemployment, Canada's monthly GDP, and last but certainly not US Personal Income/PCE and the Chicago PMI. However being end of month and quarter, reaction may prove to be muted. Next week's schedule has the usual start of month mix of PMIs, US labour data, Japan Wages and German Orders, and a very predictable no change on rates from Australia's RBA.
** Eurozone - Sept CPI **
- Following the big overshoot on German CPI/HICP relative to forecasts (2.3%/2.2% y/y vs. expected 2.0%/1.9%), the consensus for the pan Eurozone reading will be much higher than the prior estimate of 2.1% y/y headline and 1.1% y/y core, probably closer to 2.3%/2.4% headline and perhaps 1.3% core, despite the small misses in y/y terms in France and Spain. Eminently some will counter that with M3 growth slowing rather sharply yesterday (3.5% y/y vs. expected 3.9%, July 4.0%), well below the ECB's old reference rate of 4.5%, the ECB will not be reaching for the rate trigger earlier than its current guidance. However a closer look at the credit component actually suggests that this element continues to expand at a decent clip, even if one might argue that with all the QE that the ECB has done, it should be much stronger. But if the markets' non-reaction to the German report yesterday is anything, then today's report may prove to be a non-event.
** U.S.A. - Personal Income / PCE **
- Personal Income and PCE are projected to sustain their solid recent profile with respective rises of 0.4% m/m (predicated on that rise in Average Hourly Earnings) and 0.3% m/m, while both headline and core PCE deflators are seen up 0.1% m/m, for y/y readings of 2.2% and 2.0%, in other words around the Fed's target, and per se underlining the message from Powell and the FOMC this week. The Chicago PMI is also due, and is expected to dip a little further to 62.0 from August's 63.6 and July's 65.5, but in absolute terms this would still point to robust growth. It is also worth revisiting yesterday's Goods Trade Balance, with the wider than expected $-75.8 Bln deficit implying a sizeable drag on Q3 GDP from Trade. Perhaps most notable was clear evidence of a trade war impact with exports of Food, Feed & Beverages registering down 9.5% m/m, which followed a 6.3% m/m drop in July; industrial supplies exports were also weak at -5.9% m/m.
from Marc Ostwald