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MNI GLOBAL WEEK AHEAD: ECB & BOC Meets & Eurozone CPI Data in Focus

MNI (London)

The coming week is data packed, with focus on consumer sentiment indexes, preliminary PMIs and eurozone flash CPI and GDP estimates. The advance US GDP data for Q3 is also due and both the BOC and ECB are expected to deliver 75bp hikes.


Flash PMIs for October: European PMIs are forecasted to edge down across the region for both manufacturing and services in the October flash release.

Below are the consensus expectations for October, which indicate a weak start to Q4 for major economies, as many anticipate negative growth into year-end. Uncertain global economic outlooks, soaring inflation and rising interest rates continue to suppress demand in both services and manufacturing.

Steep contractions in output and/or slowing employment will be closely watched for, as well as signals of easing price pressures being sustained. Political turmoil will likely drag confidence lower for the UK and add to recessionary risks.

Source: S&P Global / MNI


Germany IFO: Another (albeit modest) deterioration of economic outlooks to fresh early 2020 lows is on the cards in the October IFO survey. Both indexes have contracted sharply since the onset of the Ukraine war and were last optimistic last summer. Acute concerns regarding inflation and gas/energy supply shortages persist.

US Consumer Confidence: The Conference Board consumer sentiment indicator is projected to see a 2.5-point decline to 105.5. Eyes will be on shifts in inflation expectations and purchasing intentions.


Australia CPI: Australian Q3 CPI will show a continued upwards trend, as prices are estimated to have accelerated by +1.6% q/q and +7.0% y/y (vs +6.1% y/y in Q2). This would be the highest annualised quarterly reading since 1990. The RBA unexpectedly raised rates by a more modest 25bp to 2.60% at its October meeting, following four consecutive 50bp moves. The monthly meeting frequency has allowed it to slow its tightening, however a large upside surprise to Q3 CPI may see this slowing reconsidered.

France Consumer Confidence: A one-point moderation to 78 is expected in the October consumer sentiment index for France, which would drive the index to a fresh series low (the survey began in 1972). Despite remaining modest, a notable sharp increase in unemployment fears was recorded in September as consumers begin to fear recessionary outlooks could impact their employment.

BOC Meeting: The consensus is largely split between a 50/75bp hike for the October Bank of Canada meeting. Markets are pricing around 70bp. Core inflation has moderated slightly since the Bank last met but it may well be too slow a moderation for the Bank's liking. Combined with shorter-term consumer inflation expectations rising, an increasingly highlighted weaker Canadian dollar and an expected further 75bp hike from the Fed the following week, the BoC could easily opt for another 75bp hike to avoid disappointing the market. Clues on the rate path ahead will be highly significant as the policy rate will be firmly into restrictive territory.


Germany GfK Consumer Confidence: A one-point improvement is expected in November consumer confidence outlooks, indicating sentiment having already hit rock bottom rather than a notable turnaround in outlooks. Soaring energy and food costs and worsening geopolitical tensions have supplied little ground for improved consumer outlooks

Italy Consumer/Business Confidence: Italian business and consumer confidence is anticipated to add to a slew of extremely negative sentiment in the October eurozone data, yet should remain above European debt crisis lows.

ECB Meeting: Another 75bp hike is largely expected at the ECB’s October meeting, with markets currently pricing around 72bp. This decision comes ahead of the October flash CPI estimate, which will likely push headline inflation back above 10.0% following September’s downwards revision to +9.9% y/y. Markets will be closely watching for indications of timelines for quantitative tightening, changes to TLTRO conditions or tiering and an outside risk of information regarding a possible new interest rate mechanism following recent rumours.

US GDP: Following contractions in Q1 and Q2 constituting a technical recession for the US, the Q3 advance GDP reading is anticipated to bounce back to around +2.3% q/q growth. Strong energy exports lifted by the hot US dollar alongside inventory growth will have provided a substantial boost to US headline GDP, however, this data will likely veil slowing private consumption and waning demand in the economy.


France/Spain/Italy & Germany Flash HICP: The October flash inflation estimates will highlight the divergence between key eurozone economies. Consensus forecasts for October are in the graph below. September saw the eurozone aggregate, Germany and Italy hit euro-area highs. Both Italy and France are expected to see price growth quicken again in October, whilst Germany will be closely watched for initial signs of having peaked last month.

France/Spain/Germany Flash GDP: The prelim estimates for Q3 growth are expected to see major euro area economies close to stalling, whilst Germany dips into a contraction. French GDP is expected to weaken to +0.1% q/q (vs +0.5% q/q in Q2), Spain to see a larger slide to +0.3% q/q (from +1.5% q/q in Q2), whilst German GDP is forecast at -0.2% q/q after almost stalling at +0.1% q/q in Q2. Downside surprises will feed into the aggregate reading for the Eurozone due on the following Monday, which was projected to have slowed to +0.1% q/q in the ECB’s September forecasts.

US Personal Income/Consumption: September personal income and spending are estimated to remain robust, keeping pace with August at +0.3% and +0.4% respectively. Signs of cooling consumption will be closely watched as consumers grapple with lower disposable income. Also due Friday are the Q3 Employment Cost Index which Fed Chair Powell has cited as a wage pressure signal that they pay close attention to; also the final Michigan inflation expectations following the upside surprise in the prelim. The Fed will be closely monitoring this data ahead of the November 2 rate decision.

Source: MNI / Bloomberg

24/10/20220030/0930**JP IHS Markit Flash Japan PMI
24/10/20220715/0915**FR IHS Markit Services PMI (p)
24/10/20220715/0915**FR IHS Markit Manufacturing PMI (p)
24/10/20220730/0930**DE IHS Markit Services PMI (p)
24/10/20220730/0930**DE IHS Markit Manufacturing PMI (p)
24/10/20220800/1000**EU IHS Markit Services PMI (p)
24/10/20220800/1000**EU IHS Markit Manufacturing PMI (p)
24/10/20220800/1000**EU IHS Markit Composite PMI (p)
24/10/20220830/0930***UK IHS Markit Manufacturing PMI (flash)
24/10/20220830/0930***UK IHS Markit Services PMI (flash)
24/10/20220830/0930***UK IHS Markit Composite PMI (flash)
24/10/20221300/1400UK Deadline for MPs to nominate next Cons leader
24/10/20221345/0945***US IHS Markit Manufacturing Index (flash)
24/10/20221345/0945***US IHS Markit Services Index (flash)
24/10/20221530/1130*US US Treasury Auction Result for 13 Week Bill
24/10/20221530/1130*US US Treasury Auction Result for 26 Week Bill
24/10/20221700/1800UK Result of 1st round of MP voting for next Cons leader
24/10/20222000/2100UK Result of 2nd round of MP voting for next Cons leader
25/10/20220600/0800**SE PPI
25/10/20220700/0900**ES PPI
25/10/20220800/1000***DE IFO Business Climate Index
25/10/20220855/0955UKBOE Pill at ONS ‘Understanding the cost of living through statistics’
25/10/20220900/1000*UK Index Linked Gilt Outright Auction Result
25/10/20221000/1100**UK CBI Industrial Trends
25/10/20221230/0830**US Philadelphia Fed Nonmanufacturing Index
25/10/20221255/0855**US Redbook Retail Sales Index
25/10/20221300/1500**BE BNB Business Sentiment
25/10/20221300/0900**US S&P Case-Shiller Home Price Index
25/10/20221300/0900**US FHFA Home Price Index
25/10/20221400/1000***US Conference Board Consumer Confidence
25/10/20221700/1300*US US Treasury Auction Result for 2 Year Note
25/10/20221755/1355US Fed Governor Christopher Waller
26/10/20220030/1130***AU CPI inflation
26/10/20220600/1400**CN MNI China Liquidity Suvey
26/10/20220645/0845**FR Consumer Sentiment
26/10/20220800/1000**EU M3
26/10/20220900/1000**UK Gilt Outright Auction Result
26/10/20221100/0700**US MBA Weekly Applications Index
26/10/20221230/0830**US Advance Trade, Advance Business Inventories
26/10/20221400/1000***CA Bank of Canada Policy Decision
26/10/20221400/1000CA BOC Monetary Policy Report
26/10/20221400/1000***US New Home Sales
26/10/20221430/1030**US DOE weekly crude oil stocks
26/10/20221500/1100CA BOC Governor Press Conference
26/10/20221530/1130**US US Treasury Auction Result for 2 Year Floating Rate Note
26/10/20221700/1300*US US Treasury Auction Result for 5 Year Note
27/10/20220030/1130**AU Trade price indexes
27/10/20220600/0800*DE GFK Consumer Climate
27/10/20220700/0900**SE Economic Tendency Indicator
27/10/20220800/1000**IT ISTAT Consumer Confidence
27/10/20220800/1000**IT ISTAT Business Confidence
27/10/20221000/1100**UK CBI Distributive Trades
27/10/20221215/1415***EU ECB Main Refi Rate
27/10/20221215/1415***EU ECB Deposit Rate
27/10/20221215/1415***EU ECB Marginal Lending Rate
27/10/20221230/0830*CA Payroll employment
27/10/20221230/0830**US Jobless Claims
27/10/20221230/0830**US durable goods new orders
27/10/20221230/0830***US GDP (adv)
27/10/20221230/0830**US WASDE Weekly Import/Export
27/10/20221245/1445EU ECB post-policy decision press conference
27/10/20221430/1030**US Natural Gas Stocks
27/10/20221700/1300**US US Treasury Auction Result for 7 Year Note
28/10/20220430/0630***DE North Rhine Westphalia CPI
28/10/20220530/0730**FR Consumer Spending
28/10/20220530/0730***FR GDP (p)
28/10/20220600/0800***SE GDP
28/10/20220600/0800**SE Retail Sales
28/10/20220645/0845***FR HICP (p)
28/10/20220645/0845**FR PPI
28/10/20220700/0900***ES GDP (p)
28/10/20220700/0900***ES HICP (p)
28/10/20220700/0900*CH KOF Economic Barometer
28/10/20220800/1000***DE GDP (p)
28/10/20220800/1000***DE Bavaria CPI
28/10/20220800/1000**IT PPI
28/10/20220900/1100***IT HICP (p)
28/10/20220900/1100**EU Economic Sentiment Indicator
28/10/20220900/1100*EU Consumer Confidence, Industrial Sentiment
28/10/20220900/1100*EU Business Climate Indicator
28/10/20220900/1100***DE Saxony CPI
28/10/20221030/1330RU Russia Central Bank Key Rate Decision
28/10/20221200/1400***DE HICP (p)
28/10/2022-***JP BOJ policy announcement
28/10/2022-UK Result of Cons members' vote for next Cons leader
28/10/20221230/0830***CA Gross Domestic Product by Industry
28/10/20221230/0830**US Personal Income and Consumption
28/10/20221230/0830**US Employment Cost Index
28/10/20221400/1000**US NAR pending home sales
28/10/20221400/1000***US Final Michigan Sentiment Index
28/10/20221500/1100CA Finance Dept monthly Fiscal Monitor (expected)

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