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

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.

Monday

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

Tuesday

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.

Wednesday

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.

Thursday

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.

Friday

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

Date	GMT/Local	Impact	Flag	Country	Event
24/10/2022	0030/0930	**		JP	IHS Markit Flash Japan PMI
24/10/2022	0715/0915	**		FR	IHS Markit Services PMI (p)
24/10/2022	0715/0915	**		FR	IHS Markit Manufacturing PMI (p)
24/10/2022	0730/0930	**		DE	IHS Markit Services PMI (p)
24/10/2022	0730/0930	**		DE	IHS Markit Manufacturing PMI (p)
24/10/2022	0800/1000	**		EU	IHS Markit Services PMI (p)
24/10/2022	0800/1000	**		EU	IHS Markit Manufacturing PMI (p)
24/10/2022	0800/1000	**		EU	IHS Markit Composite PMI (p)
24/10/2022	0830/0930	***		UK	IHS Markit Manufacturing PMI (flash)
24/10/2022	0830/0930	***		UK	IHS Markit Services PMI (flash)
24/10/2022	0830/0930	***		UK	IHS Markit Composite PMI (flash)
24/10/2022	1300/1400			UK	Deadline for MPs to nominate next Cons leader
24/10/2022	1345/0945	***		US	IHS Markit Manufacturing Index (flash)
24/10/2022	1345/0945	***		US	IHS Markit Services Index (flash)
24/10/2022	1530/1130	*		US	US Treasury Auction Result for 13 Week Bill
24/10/2022	1530/1130	*		US	US Treasury Auction Result for 26 Week Bill
24/10/2022	1700/1800			UK	Result of 1st round of MP voting for next Cons leader
24/10/2022	2000/2100			UK	Result of 2nd round of MP voting for next Cons leader
25/10/2022	0600/0800	**		SE	PPI
25/10/2022	0700/0900	**		ES	PPI
25/10/2022	0800/1000	***		DE	IFO Business Climate Index
25/10/2022	0855/0955			UK	BOE Pill at ONS ‘Understanding the cost of living through statistics’
25/10/2022	0900/1000	*		UK	Index Linked Gilt Outright Auction Result
25/10/2022	1000/1100	**		UK	CBI Industrial Trends
25/10/2022	1230/0830	**		US	Philadelphia Fed Nonmanufacturing Index
25/10/2022	1255/0855	**		US	Redbook Retail Sales Index
25/10/2022	1300/1500	**		BE	BNB Business Sentiment
25/10/2022	1300/0900	**		US	S&P Case-Shiller Home Price Index
25/10/2022	1300/0900	**		US	FHFA Home Price Index
25/10/2022	1400/1000	***		US	Conference Board Consumer Confidence
25/10/2022	1700/1300	*		US	US Treasury Auction Result for 2 Year Note
25/10/2022	1755/1355			US	Fed Governor Christopher Waller
26/10/2022	0030/1130	***		AU	CPI inflation
26/10/2022	0600/1400	**		CN	MNI China Liquidity Suvey
26/10/2022	0645/0845	**		FR	Consumer Sentiment
26/10/2022	0800/1000	**		EU	M3
26/10/2022	0900/1000	**		UK	Gilt Outright Auction Result
26/10/2022	1100/0700	**		US	MBA Weekly Applications Index
26/10/2022	1230/0830	**		US	Advance Trade, Advance Business Inventories
26/10/2022	1400/1000	***		CA	Bank of Canada Policy Decision
26/10/2022	1400/1000			CA	BOC Monetary Policy Report
26/10/2022	1400/1000	***		US	New Home Sales
26/10/2022	1430/1030	**		US	DOE weekly crude oil stocks
26/10/2022	1500/1100			CA	BOC Governor Press Conference
26/10/2022	1530/1130	**		US	US Treasury Auction Result for 2 Year Floating Rate Note
26/10/2022	1700/1300	*		US	US Treasury Auction Result for 5 Year Note
27/10/2022	0030/1130	**		AU	Trade price indexes
27/10/2022	0600/0800	*		DE	GFK Consumer Climate
27/10/2022	0700/0900	**		SE	Economic Tendency Indicator
27/10/2022	0800/1000	**		IT	ISTAT Consumer Confidence
27/10/2022	0800/1000	**		IT	ISTAT Business Confidence
27/10/2022	1000/1100	**		UK	CBI Distributive Trades
27/10/2022	1215/1415	***		EU	ECB Main Refi Rate
27/10/2022	1215/1415	***		EU	ECB Deposit Rate
27/10/2022	1215/1415	***		EU	ECB Marginal Lending Rate
27/10/2022	1230/0830	*		CA	Payroll employment
27/10/2022	1230/0830	**		US	Jobless Claims
27/10/2022	1230/0830	**		US	durable goods new orders
27/10/2022	1230/0830	***		US	GDP (adv)
27/10/2022	1230/0830	**		US	WASDE Weekly Import/Export
27/10/2022	1245/1445			EU	ECB post-policy decision press conference
27/10/2022	1430/1030	**		US	Natural Gas Stocks
27/10/2022	1700/1300	**		US	US Treasury Auction Result for 7 Year Note
28/10/2022	0430/0630	***		DE	North Rhine Westphalia CPI
28/10/2022	0530/0730	**		FR	Consumer Spending
28/10/2022	0530/0730	***		FR	GDP (p)
28/10/2022	0600/0800	***		SE	GDP
28/10/2022	0600/0800	**		SE	Retail Sales
28/10/2022	0645/0845	***		FR	HICP (p)
28/10/2022	0645/0845	**		FR	PPI
28/10/2022	0700/0900	***		ES	GDP (p)
28/10/2022	0700/0900	***		ES	HICP (p)
28/10/2022	0700/0900	*		CH	KOF Economic Barometer
28/10/2022	0800/1000	***		DE	GDP (p)
28/10/2022	0800/1000	***		DE	Bavaria CPI
28/10/2022	0800/1000	**		IT	PPI
28/10/2022	0900/1100	***		IT	HICP (p)
28/10/2022	0900/1100	**		EU	Economic Sentiment Indicator
28/10/2022	0900/1100	*		EU	Consumer Confidence, Industrial Sentiment
28/10/2022	0900/1100	*		EU	Business Climate Indicator
28/10/2022	0900/1100	***		DE	Saxony CPI
28/10/2022	1030/1330			RU	Russia Central Bank Key Rate Decision
28/10/2022	1200/1400	***		DE	HICP (p)
28/10/2022	-	***		JP	BOJ policy announcement
28/10/2022	-			UK	Result of Cons members' vote for next Cons leader
28/10/2022	1230/0830	***		CA	Gross Domestic Product by Industry
28/10/2022	1230/0830	**		US	Personal Income and Consumption
28/10/2022	1230/0830	**		US	Employment Cost Index
28/10/2022	1400/1000	**		US	NAR pending home sales
28/10/2022	1400/1000	***		US	Final Michigan Sentiment Index
28/10/2022	1500/1100			CA	Finance Dept monthly Fiscal Monitor (expected)