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The two main data releases Wednesday will be the UK m/m GDP for August and the US September CPI print. German final inflation and euro area industrial production will also be closely watched.
UK GDP set for August bounce (0700 BST)
UK output likely rose by 0.5% between July and August, according to City analysts, outpacing the 0.1% gain in July, but evidence of softening consumer confidence hint at downside risks to forecasts. Retail sales declined by 0.9% in August, extending a 2.8% plunge in July. While sales comprise less than 6% of gross domestic product, the fall may provide some insight into sentiment at the end of the third quarter. However, a moderation of the so-called pingdemic, which forced large numbers of workers to isolate in July, could counter consumer caution.
Analysts forecast a 0.6% monthly increase in services, despite a sharp decrease in the the IHS Markit service sector PMI to 55.0 from 59.6 in July (although the reading remained in expansionary territory). A 45% plunge in motor vehicle sales suggests the the wholesale and retail sector, which comprises 10.4% of GDP, may have dropped into the red in August.
Manufacturing output could also fall short of the predicted 0.1% increase, with automobile production declining by 30% in August, according to the SMMT. However the production PMI declined only modestly in August, to 60.3 from 60.4 in July.
No September pull-back for U.S. CPI (1330 BST)
Inflation continued to tick up through September, with market analysts forecasting an increase of 0.3%, the same as August. That will leave annual inflation at 5.3%.
Higher gasoline prices should account for most of that increase, though surging used car prices should also boost total CPI.
Excluding energy and food prices, CPI should increase 0.2%, according to Bloomberg, compared to 0.1% in August. From a year earlier, core CPI should increase 4%.
Federal Reserve Governor Lael Brainard is the only senior policymaker slated to speak Wednesday, but with the World Bank and IMF autumn meetings taking place, unscheduled speakers could appear 0n the wires.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.