Posted by on October 10, 2016 1:13 pm
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Categories: Australia Auto Sales Bank of New York BOE Bond China Citigroup Consumer Sentiment CPI Credit Conditions Economy Equity Markets Eurozone federal reserve Federal Reserve Bank Federal Reserve Bank Of Boston Federal Reserve Bank of New York france germany goldman sachs Housing Starts Initial Jobless Claims Janet Yellen japan Market Conditions Michigan Monetary Policy Neel Kashkari New York Fed New York State NFIB recovery SIFMA Trade Balance University Of Michigan Wells Fargo William Dudley

The week ahead turns attention squarely towards the US, with the market’s reaction to the second presidential debate on Sunday the key focus during the Columbus Day US session. The other main event will be the September FOMC Minutes, following US data and an employment report that has left many banks comfortable with a December Fed hike. The minutes are likely to reveal a heated debate about the appropriate course of policy, revealing a discussion about the costs and benefits of keeping rates at the current low levels, highlighting the growing divergence of views within the committee.

Key data by region:

In the US focus will be on the market’s reaction to the second presidential debate, FOMC Minutes but also retail sales, import and producer prices and Michigan sentiment. We also hear from various Fed speakers throughout the week, and Chair Yellen gives a keynote speech on Friday.

In the Eurozone, we have a quiet data calendar with IP data and the German ZEW coming up. We do hear from a slew of ECB speakers, with focus on President Draghi over the weekend, especially given the increased taper talk.

In the UK, housing data, construction output and BOE speakers including Governor Carney coming up, while political noise around Brexit and Article 50 likely continues.

In Australia, we receive business and consumer sentiment surveys, housing finance and the RBA’s Financial Stability Review.

In Japan, current account and trade balance, machine orders and PPI on tap.

In Canada, housing starts the only release of note in a quiet week.

Broken down by day:

It’s a quiet start to the week today with just Germany trade data, France business sentiment and the Euro area Sentix investor confidence reading due this morning. There’s no data due in the US with it being Columbus Day. US equity markets are open but bond markets are shut.

Tuesday kicks off in Germany where the October ZEW survey will be released. In the US the NFIB small business optimism reading and labour market conditions index are due out.

We kick off in Japan on Wednesday with the latest machine orders data. Over in Europe we’ll get the final revised September inflation report in France along with the August industrial production print for the Euro area. Over in the US the JOLTS report for August is the sole data release while the September FOMC minutes will then be released in the evening.

Thursday kicks off with the September trade data for China. In Europe we’ll then get the final September inflation report in Germany, while in the US session we’ll get initial jobless claims and the import price index.

It’s a busier end to the week on Friday. In China the CPI and PPI prints for September will be closely watched. In Europe we’ll then get UK construction output and Euro area trade data, while the BoE will also release its latest credit conditions and bank liabilities surveys. Over in the US it’s all eyes on the September retail sales data, while PPI, business inventories and finally the first estimate of the University of Michigan consumer sentiment survey for October will be out.

* * *

Away from the data, the Fedspeakers during the week include Evans and Kashkari on Tuesday, Dudley and George on Wednesday, Harker on Thursday and Kashkari, Rosengren and Fed Chair Yellen on Friday. The latter is due to speak in Boston on the topic of ‘macroeconomic research after the crisis’. Over at the ECB we’ll hear from ECB officials including Visco, Mersch and Coeure this week. Of course the other big focus is on the unofficial commencement of earnings season in the US. Alcoa report prior to the open tomorrow while JP Morgan, Citigroup and Wells Fargo headline the banks reporting on Friday.

Main events over the week summarized:

And a focus on just the US courtesy of Goldman Sachs.

Monday, October 10

  • Columbus Day holiday observed. SIFMA recommends bond markets remain closed.  
  • 09:30 PM Chicago Fed President Evans (FOMC non-voter) speaks: Federal Reserve Bank of Chicago President Charles Evans will give a speech on the economy and policy at an event held by the Australian Business Economists in Sydney, Australia. Last week, President Evans said that he would be fine with the Fed raising rates once this year, adding that the most important issue “is not when the next moves takes place but it’s stating more clearly what the move after that would be based upon.”

Tuesday, October 11

  • 06:00 AM NFIB small business optimism index, September (consensus 95.0, last 94.4)
  • 10:00 AM Labor market conditions index, September (last -0.7)
  • 11:00 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Federal Reserve Bank of Minneapolis President Neel Kashkari will speak at a town hall forum on ending “Too Big to Fail” and the role of the Federal Reserve in Arden Hill, Minnesota. Media Q&A is not expected.

Wednesday, October 12

  • 09:40 AM Kansas City Fed President George (FOMC voter) speaks: Federal Reserve Bank of Kansas City President Esther George will give a speech at the Federal Reserve Bank of Chicago’s Annual Payments Symposium. Last week, President George, who dissented at the September FOMC meeting, remarked that the September jobs report was encouraging and suggestive of continued momentum.
  • 10:00 AM JOLTS job openings, August (consensus 5,800, last 5,871): The JOLTS measure of job openings rose to a new high in July. Consensus expects job openings to edge down in August.
  • 10:00 AM New York Fed President Dudley (FOMC voter) speaks: Federal Reserve Bank of New York President William Dudley will speak at a fireside chat with the Business Council of New York State in Albany. Last week, President Dudley remarked that monetary policy remains accommodative and he suggested that more effective communication would help the Fed meet its inflation objective.
  • 02:00 PM Monthly budget statement, September (consensus $29.3bn, last -$107.1bn): Consensus expects the federal budget balance to rise to $29.3bn in September.
  • 02:00 PM Minutes from the September 20-21 FOMC meeting: The September FOMC meeting statement described risks to the economic outlook as “roughly balanced.” In the minutes, we will be watching for any indications about the committee’s sense of urgency regarding rate increases in the near term.

Thursday, October 13

  • 08:30 AM Initial jobless claims, week ended October 8 (GS 255k, consensus 253k, last 249k): Continuing jobless claims, week ended October 1 (last 2,058k):  We expect initial jobless claims to edge up to 255k after claims declined to the lowest level since April last week. The fall in claims last week was relatively widespread across states, with the largest drops in California (-3.1k) and Georgia (-1.9k).
  • 12:15 PM Philadelphia Fed President Harker (FOMC non-voter) speaks: Federal Reserve Bank of Philadelphia President Patrick Harker will give a speech on the economic outlook to the World Affairs Council of Philadelphia. Audience and media Q&A is expected.
  • 09:30 PM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Federal Reserve Bank of Minneapolis President Neel Kashkari will speak at a town hall forum on ending “Too Big to Fail” and the role of the Federal Reserve in Missoula, Montana. Media Q&A is not expected.

Friday, October 14

  • 08:30 AM Retail sales, September (GS +0.7%, consensus +0.6%, last -0.3%); Retail sales ex-auto, September (GS +0.4%, consensus +0.5%, last -0.1%); Retail sales ex-auto & gas, September (GS +0.3%, consensus +0.3%, last -0.1%); Core retail sales, September (GS +0.4%, consensus +0.3%, last -0.1%): We expect headline retail sales to rise 0.7% after gasoline prices rose and auto sales strengthened in September. Core retail sales are likely to increase by 0.4% after a softer-than-expected August report as the retail components of service sector surveys looked strong September.
  • 08:30 AM PPI final demand, September (GS +0.3%, consensus +0.2%, last flat); PPI ex-food and energy, September (GS +0.2%, consensus +0.1%, last +0.1%); PPI ex-food, energy, and trade, September (GS flat, consensus +0.1%, last +0.3%): We expect PPI ex-food, energy, and trade to be flat and for headline PPI to increase by 0.3%. Last month, producer prices were softer than anticipated, led by weakness in durable consumer goods and private capital equipment prices.
  • 08:30 AM Boston Fed President Rosengren (FOMC voter) speaks: Federal Reserve Bank of Boston President Eric Rosengren will give opening remarks at the Boston Fed’s 60th annual economic conference, “The Elusive “Great” Recovery: Causes and Implications for Future Business Cycle Dynamics.”
  • 10:00 AM University of Michigan consumer sentiment, October preliminary (GS 92.5, consensus 92.0, last 91.2): We expect the University of Michigan consumer sentiment index to rise to 92.5 in the October preliminary estimate, following a 1.2pt increase in the final September report. The measure remains in the middle of its range over the past year.
  • 10:00 AM Business inventories, August (consensus +0.1%, last flat): Consensus expects a 0.1% increase in inventory levels in August.
  • 01:30 PM Fed Chair Yellen (FOMC voter) speaks: Federal Reserve Chair Janet Yellen will give the keynote address at the Boston Fed’s 60th annual economic conference, “The Elusive “Great” Recovery: Causes and Implications for Future Business Cycle Dynamics.”

Source: DB, GS, BofA

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