In the traditionally quiet post-payrolls week, attention will focus on the US CPI report, retail sales and FOMC minutes as well as the Catalonia vote and Eurozone industrial production. Separately, we have UK construction, Chinese PMIs, Japanese BoP and inflation in the Scandies.
A breakdown of the key events this week from BofA:
- FOMC minutes and CPI in the US
This week, the FOMC releases minutes from their September 20 meeting. Focus is on future hikes and recent low inflation. On Friday we have CPI, retail sales and U. of Michigan Sentiment. Our economists expect CPI to rise to 0.6% m/m in September due to an increase in gasoline prices and core CPI to remain unchanged at 0.2% m/m.
- A key week for Catalonia
The Catalan parliament meets early this week to discuss secession. If they declare independence, the Spanish government could take control of the region. Our economists note that escalation could negatively impact Spain's economic recovery, as Catalonia makes up 20% of the Spanish economy. Internal division in the secessionist movement and their thin majority in the Catalan parliament provide hope for de-escalation.
- Watch for industrial production for Europe and UK
Industrial production growth releases for Germany, France and Italy early in the week. Our economists expect growth down to 2.0% y/y from 4.0% in Germany and a slight decrease to 3.0% y/y for the Euro area. In the UK we expect industrial production growth at 0.5% y/y. Final CPI will be released in Spain, France and Germany later in the week.
- The week ahead in Emerging Markets
There will be monetary policy meetings in Peru, Singapore and Kazakhstan. Inflation releases in Brazil and Mexico. Current account data in Russia and Turkey.
Next, courtesy of DB's Jim Reid, here is a breakdown of the key global daily events in the coming week:
- Monday: In what is a fairly light day for data, we start with the Industrial production in Germany for August, follow by the September Bank of France business sentiment reading and October Sentix investor confidence reading for the Eurozone. It’s worth noting that the fifth round of Brexit talks between the UK and EU also start on Monday while the ECB’s Mersch and Lautenschlaeger are scheduled to speak. There is no data in the US due. The Columbus Day holiday means the Treasury market will close but stock exchanges remain open.
- Tuesday: A fairly busy day, particularly in Europe. Overnight though we are due get comments from the BoJ’s Kuroda. Following that the most significant releases in Europe include the August industrial production prints for France, Italy and the UK along with August trade data for Germany and the UK. The only reading due in the US is the September NFIB small business optimism print. The Fed’s Kashkariis also scheduled to speak midway through the afternoon. The IMF and World Bank annual meetings also start today and run through to Saturday.
- Wednesday: Overnight the main focus will likely be on comments from the Fed’s Kaplan, while China’s Xi Jingping is also due to deliver a communique following the meeting of the Chinese Communist Party. In Europe the final September CPI revisions for Spain are due. The UK’s Philip Hammond will face questions in the House of Commons, including on Brexit related issues. Across the pond the big focus in the evening in the US will be the FOMC meeting minutes from the September meeting. Datawise we’ll receive August JOLTS data prior to this, while the Fed’s Evans and Williams are both due to speak later on. The ECB’s Praet is also due to deliver comments in the evening.
- Thursday: Overnight, RICS house price data in the UK and PPI data out of Japan will be out. In France we’ll receive the final September CPI revisions, while Eurozone industrial production data for August will be out. The BoE will also release the latest credit conditions and bank liabilities surveys mid-morning. In the US the big focus on Thursday will be the September PPI report, while the latest weekly initial jobless claims will also be released. Thursday is also a busy day for speakers with the ECB’s Draghi and Fed’s Brainard due to take part in a monetary policy panel in the afternoon, while the Fed’s Powell will speak shortly after at a conference in Washington. President Trump is also tentatively scheduled to give a speech on US policy towards Iran. Earnings season also gathers pace with JP Morgan and Citi scheduled to report.
- Friday: We end the week with a bit of a bang on Friday. Overnight the September trade numbers out of China will be released. That’s before we get the final September CPI revisions for Germany and Italy. In the US it’s all eyes on the September CPI report, while last month’s retail sales numbers are also worth keeping a close eye on. The preliminary October University of Michigan consumer sentiment reading will also be out along with August business inventories data. Not to be outdone, the Fed’s Evans, Kaplan and Powell are all on the cards to speak on Friday. Bank of America also reports earnings.
Finally, here is a detailed summary of all daily events in the coming week from Goldman, including consensus estimates:
The key economic releases this week are the CPI and retail sales reports on Friday. Additionally, the minutes from the September FOMC meeting will be released on Wednesday. There are several speaking engagements by Fed officials this week, including a speech by Chair Yellen on Sunday.
Monday, October 9
- US holiday observed. SIFMA recommends bond markets remain closed. There are no major economic data releases.
Tuesday, October 10
- 06:00 AM NFIB small business optimism, September (consensus 105.0, last 105.3)
- 10:00 AM Minneapolis Fed President Kashkari (FOMC voter) speaks; President Neel Kashkari will give opening remarks at the Regional Economic Conditions Conference hosted by the Minneapolis Fed.
- 08:00 PM Dallas Fed President Kaplan (FOMC voter) speaks: Dallas Fed President Robert Kaplan will participate in a moderated Q&A session at the Stanford Institute for Economic Policy Research Associates Meeting. Audience and media Q&A is expected.
Wednesday, October 11
- 07:15 AM Chicago Fed President Evans (FOMC voter) speaks; Chicago Fed President Charles Evans will participate in a moderated discussion on the economy and monetary policy. Audience and media Q&A is expected.
- 10:00 AM JOLTS job openings, August (consensus 6,160k, last 6,170k)
- 02:00 PM Minutes from the September 19-20 FOMC meeting: The September FOMC meeting announced the start of balance sheet runoff, as expected. The dot plot continued to show strong support for a third rate hike this year and three hikes in 2018, and Chair Yellen continued to downplay the soft inflation data in her post-meeting press conference. On the dovish side, the median longer-run funds rate projection declined to 2.75%. In the minutes, we will look for further discussion of the soft inflation data and the rationale for further reducing the neutral rate projection.
- 02:40 PM San Francisco Fed President Williams (FOMC non-voter) speaks: San Francisco Fed President John Williams will give a speech on community leaders. Audience and media Q&A is expected.
Thursday, October 12
- 08:30 AM PPI final demand, September (GS +0.5%, consensus +0.4%, last +0.2%); PPI ex-food and energy, September (GS +0.2%, consensus +0.2%, last +0.1%); PPI ex-food, energy, and trade, September (GS +0.2%, consensus +0.2%, last +0.2%); We estimate a 0.5% increase in headline PPI, reflecting stronger core producer prices. We expect a smaller 0.2% increase in in the PPI ex-food, energy, and trade services category. In the August report, the producer price index increased less than expected, reflecting muted core finished goods prices and weakness in the medical care category.
- 08:30 AM Initial jobless claims, week ended October 7 (GS 250k, consensus 252k, last 260k); Continuing jobless claims, week ended September 30 (consensus 1,930k, last 1,938k): We estimate initial jobless claims fell 10k to 250k in the week ended October 7, reflecting continued post-hurricane normalization in Texas and Florida filings, as well as a modest pullback in Missouri, New York, and Ohio claims, which appeared elevated in the most recent week. Continuing claims – the number of persons receiving benefits through standard programs – are also expected to continue to decline.
10:30 AM Fed Governor Brainard (FOMC voter) speaks: Federal Reserve Governor Lael Brainard will participate in a panel discussion with ECB President Mario Draghi. The topic of the discussion is a monetary policy paper presented by former Fed Chairman Bernanke at the Peterson Institute for International Economics in Washington D.C. Audience Q&A is expected.
- 10:30 AM Fed Governor Powell (FOMC voter) speaks: Federal Reserve Governor Jerome Powell will give a speech on “Prospects for Emerging Market Economies in a Normalizing Global Economy” at the Institute of International Finance’s conference on emerging markets in Washington D.C. Questions from a moderator are expected.
- 02:00 PM Monthly budget statement, September (consensus flat, last -$107.7.0bn)
- 09:15 PM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Fed President Raphael Bostic will give a speech on “Balance Sheet Normalization in the United States” at the conference on “Unconventional Monetary Policy: Lessons Learned” in Hong Kong. Audience Q&A is expected.
Friday, October 13
- 8:30 AM CPI (mom), September (GS +0.64%, consensus +0.6%, last +0.4%); Core CPI (mom), September (GS +0.21%, consensus +0.2%, last +0.1%); CPI (yoy), September (GS +2.33%, consensus +2.3%, last +1.9%); Core CPI (yoy), September (GS +1.78%, consensus +1.8%, last +1.7%): We estimate a 0.21% increase in September core CPI (mom sa) and a one tenth increase in the year-over-year rate to +1.8%. Our forecast reflects a rebound in used car prices, an alcohol tax in Pennsylvania, an increase in the lodging away from home component, and an increase in airfares driven by the sharp rise in jet fuel prices in the first half of the month. On the negative side, promotions from wireless carriers could weigh on the communications category. We estimate a 0.64% increase in headline CPI, primarily reflecting higher energy prices. This would leave the year-over-year rate four tenths higher at 2.3%.
- 08:30 AM Retail sales, September (GS +1.9%, consensus +1.6%, last -0.2%); Retail sales ex-auto, September (GS +0.9%, consensus +0.9%, last +0.2%); Retail sales ex-auto & gas, September (GS +0.3%, consensus +0.4%, last -0.1%); Core retail sales, September (GS +0.3%, consensus +0.4%, last -0.2%): We estimate core retail sales (ex-autos, gasoline, and building materials) rose 0.3% in September, which would be a lackluster rebound following the Hurricane-related 0.2% decline in August. We expect disruptions related to Hurricane Irma in Florida and Texas will partially offset some of the post-storm rebound in Texas retail spending. Additionally, we believe some iPhone sales that typically occur in September may have been pushed back to later months, reflecting the November anticipated release of the iPhone X. Given the sharp increases in both gasoline prices and auto SAAR, we estimate a 1.9% increase in headline retail sales and a 0.9% increase in the ex-auto measure. Finally, we forecast a modest rebound in the ex-auto ex-gas measure, at +0.3% in September after -0.1% in August.
- 08:30 AM Boston Fed President Rosengren (FOMC voter) speaks: Boston Fed President Eric Rosengren will give opening remarks at the Boston Fed’s 61st Economic Conference. The topic of the conference this year is “Are Rules Made to be Broken? Discretion and Monetary Policy”.
- 10:00 AM University of Michigan consumer sentiment, October preliminary (GS 95.5, consensus 95.0, last 95.1): We estimate the University of Michigan consumer sentiment index increased 0.4pt to 95.5 in the preliminary estimate for October. Our forecast reflects a post-Hurricane rebound in sentiment, as well as a boost from favorable stock market performance and improving prospects for a potential tax cut.
- 10:00 AM Business inventories, August (consensus +0.6%, last +0.2%)
- 10:25 AM Chicago Fed President Evans (FOMC voter) speaks: Chicago Fed President Charles Evans will discuss current economic conditions and monetary policy at the 7th Annual Wisconsin Summit on Financial Literacy in Green Bay, Wisconsin. Audience and media Q&A is expected.
- 11:30 AM Dallas Fed President Kaplan (FOMC voter) speaks: Dallas Fed President Robert Kaplan will participate in a moderated Q&A session at the CFA Institute’s Fixed Income Management Conference in Boston. Audience Q&A is expected as well.
- 01:00 PM Fed Governor Powell (FOMC voter) speaks: Federal Reserve Governor Jerome Powell will give the keynote speech at the Boston Fed’s 61st Economic Conference. The topic of the conference this year is “Are Rules Made to be Broken? Discretion and Monetary Policy”.
Sunday, October 15
- 09:00 AM Fed Chair Yellen (FOMC voter) speaks: Federal Reserve Chair Janet Yellen will give a speech on the economy and monetary policy at the 32nd Annual G30 International Banking Seminar in Washington D.C. Audience Q&A is expected.
Source: BofA, DB, Goldman