MNI GLOBAL WEEK AHEAD: Eyes on US CPI

Monday

Eurozone Sentix Investor Index: The November investor/analyst sentiment index is anticipated to slide further in October to the eighth consecutive month of contraction at around -33. This would be the lowest since May 2020. This underscored that the bloc’s anticipated winter recession is more likely to have commenced in Q3. Outlooks remain gloomy around 2008 GFC levels, and cutting inflation remains essential in stemming the collapse of purchasing power and waning demand.

Tuesday

UK Labour Report: The August UK unemployment rate is seen ticking up 0.1pp to 3.7% from the July low back to the March level. A strong acceleration in earnings to +5.9% 3m/yoy is expected in the August data, though excluding bonuses this should be a mild 0.1pp improvement on July.

A more substantial August uptick in jobless claims could receive attention from the BOE, however is unlikely to budge policy for now. Markets are currently pricing in a hot 115bp for the November decision, although market expectations tend to be more hawkish. Wider economist views see 75bp as the more likely candidate.

US NFIB Small Business Optimism: September NFIB small business optimism is forecast to hold steady at 91.8 in September, as falling energy prices stem further deterioration in outlooks.

Wednesday

UK Monthly GDP/Industrial Production/Services/Trade: The UK economy is projected to have all but stalled in August, with monthly GDP to expand by a marginal +0.1% m/m and rolling 3-month growth to contract by -0.1% after the flat reading in July. Services are projected to have seen little improvement at +0.1% m/m, whilst industrial production will likely see the third successive month of contraction, expected to slump by -0.5% m/m (versus -0.3% in July).

The strain of the weak pound points to a greater August trade deficit, estimated to have grown by GBP 1.2bln to GBP 9.0bln. Sterling, which sunk to a record low in late September. With twin-deficit fears resurfacing, trade and current account balances are coming back into the spotlight as markets gauge UK risk.

Eurozone Industrial Production: Following a stall in French IP and contractions across German and Spanish data, the consensus is looking for modest +0.7% m/m August IP growth, following the sharp -2.3% m/m contraction of July. The German data flagged a decline in input goods production and noted that energy-intensive branches were scaling back production substantially. Waning demand and elevated production costs underpin weak output outlooks. The French industry saw a bounce back in auto production, yet the aggregate output should remain more subdued.

US PPI & FOMC Minutes: US factory-gate inflation could see a muted 0.2% m/m increase in September, up from the -0.1% August deflation. More concerning is the core PPI expectation of +0.3% m/m (versus +0.4% in August). This implies that the key downwards driver remains energy and fuel costs, and broad-based PPI is seeing little relief. The ISM manufacturing survey highlighted that the pace of price growth is decelerating, and PPI should slow through September.

The FOMC minutes have carried little new information of late, yet will be worth watching for signals of criteria to slow the pace of hikes, discussion of balance sheet policy and/or adjustments to administered rates to come.

Thursday

Germany CPI (final): German harmonised CPI is likely to be confirmed at a hot +2.2% m/m and +10.9% y/y jump in September. French and Spanish final prints are due on Friday, both of which noted stalling and deflationary price growth.

US CPI: Despite headline CPI projected to cool for the third month running by 0.2pp to 8.1% y/y in September, the further 0.2pp acceleration in core CPI to +6.5% y/y confirms inflationary pressures are continuing to build in the US. The November 2 decision will see no slowing of hikes, with a fourth consecutive 75bp hike firmly on the table. As of the September meeting, the peak rate is seen above 4.5% next year. Fed Chair Powell has reiterated the need for a restrictive policy stance for some time, implying that marginal slowdowns in headline CPI will unlikely shift the hawkish FOMC in the near term.

Friday:

US Retail & Michigan Sentiment Index (prelim): Another bleak month of US retail trade is expected in the September advance data. US retail is seen growing by a modest +0.2% m/m (down from +0.3% in August) and contracting again when excluding auto at -0.1% m/m. High CPI is biting at disposable income and consumer spending is being scaled back.

The week wraps up with the U. Michigan sentiment index, for which consensus is expecting a marginal uptick to 58.8 for August. This would be the fourth month of improvement from the June low. Markets will be closely watching the 1-year and 5-10-year inflation expectations which have been edging down since June.

US CPI: (Source: US BLS)

Date	GMT/Local	Impact	Flag	Country	Event
10/10/2022	0600/0800	*		NO	CPI Norway
10/10/2022	0830/1030	*		EU	Sentix Economic Index
10/10/2022	1200/0800			US	Chicago Fed's Charles Evans
10/10/2022	-			EU	ECB Lagarde at IMF/World Bank Annual Meetings
10/10/2022	1300/1500			EU	ECB Lane Opens ECB Monetary Policy Conference
10/10/2022	1500/1100	**		US	NY Fed survey of consumer expectations
10/10/2022	1735/1335			US	Fed Vice Chair Lael Brainard
11/10/2022	2145/1045	**		NZ	Electronic card transactions m/m
11/10/2022	2301/0001	*		UK	BRC-KPMG Shop Sales Monitor
11/10/2022	2330/1030			AU	Westpac-MI Consumer Sentiment
11/10/2022	0030/1130			AU	NAB Business Survey
11/10/2022	0600/0700	***		UK	Labour Market Survey
11/10/2022	0800/1000	*		IT	Industrial Production
11/10/2022	0900/1000	*		UK	Index Linked Gilt Outright Auction Result
11/10/2022	1000/0600	**		US	NFIB Small Business Optimism Index
11/10/2022	-			EU	ECB Panetta IMF/World Bank Annual Meetings
11/10/2022	1245/1445			EU	ECB Lane Keynote Speech
11/10/2022	1400/1000	**		US	IBD/TIPP Optimism Index
11/10/2022	1530/1130			US	Philadelphia Fed's Patrick Harker
11/10/2022	1530/1130	*		US	US Treasury Auction Result for 13 Week Bill
11/10/2022	1530/1130	*		US	US Treasury Auction Result for 26 Week Bill
11/10/2022	1600/1200			US	Cleveland Fed's Loretta Mester
11/10/2022	1700/1300	***		US	US Note 03 Year Treasury Auction Result
11/10/2022	1800/1900			UK	BOE Cunliffe Panels IIF Annual Meeting
11/10/2022	1800/2000			EU	ECB Lane NY Fed Fireside Chat
11/10/2022	1835/1935			UK	BOE Bailey in Conversation w. Tim Adams at IIF Meeting
12/10/2022	2350/0850	*		JP	Machinery orders
11/10/2022	0000/2000			KR	Bank of Korea policy decision
12/10/2022	0600/0700	**		UK	UK Monthly GDP
12/10/2022	0600/0700	**		UK	Output in the Construction Industry
12/10/2022	0600/0700	**		UK	Trade Balance
12/10/2022	0600/0700	***		UK	Index of Production
12/10/2022	0600/0700	**		UK	Index of Services
12/10/2022	0800/0900			UK	BOE Haskel Keynote Speech at The Productivity Institute
12/10/2022	0900/1100	**		EU	Industrial Production
12/10/2022	0900/1000	**		UK	Gilt Outright Auction Result
12/10/2022	0930/1030			UK	BOE FPC Sept 30 meet minutes
12/10/2022	1100/0700	**		US	MBA Weekly Applications Index
12/10/2022	1135/1235			UK	BOE Pill in Conversation with SCDI
12/10/2022	-			EU	ECB Lagarde & Panetta IMF/World Bank Annual Meetings
12/10/2022	1230/0830	***		US	PPI
12/10/2022	1255/0855	**		US	Redbook Retail Sales Index
12/10/2022	1330/1530			EU	ECB Lagarde in Conversation with Tim Adams (IIF)
12/10/2022	1400/1000			US	Minneapolis Fed's Neel Kashkari
12/10/2022	1600/1200	***		US	USDA Crop Estimates - WASDE
12/10/2022	1700/1800			UK	BOE Mann Canadian Association for Economics Webinar
12/10/2022	1700/1300	**		US	US Note 10 Year Treasury Auction Result
12/10/2022	1745/1345			US	Fed Vice Chair Michael Barr
12/10/2022	2230/1830			US	Fed Governor Michelle Bowman
13/10/2022	2301/0001	*		UK	RICS House Prices
13/10/2022	0600/0800	***		DE	HICP (f)
13/10/2022	0600/0800	***		SE	Inflation report
13/10/2022	0730/0930			EU	ECB de Guindos Speech at (M&A) España y Europa Event
13/10/2022	-			EU	ECB Lagarde & Panetta IMF/World Bank Annual Meetings
13/10/2022	-			UK	BOE Mann Speech at Peterson Institute for Internat. Economics (time tcb)
13/10/2022	1230/0830	**		US	Jobless Claims
13/10/2022	1230/0830	***		US	CPI
13/10/2022	1430/1030	**		US	Natural Gas Stocks
13/10/2022	1500/1100	**		US	DOE weekly crude oil stocks
13/10/2022	1700/1300	***		US	US Treasury Auction Result for 30 Year Bond
13/10/2022	1800/1400	**		US	Treasury Budget
14/10/2022	0600/0800	*		DE	Wholesale Prices
14/10/2022	0645/0845	***		FR	HICP (f)
14/10/2022	0700/0900	***		ES	HICP (f)
14/10/2022	0900/1100	*		EU	Trade Balance
14/10/2022	-			EU	ECB Lagarde & Panetta IMF/World Bank Annual Meetings
14/10/2022	1230/0830	***		US	Retail Sales
14/10/2022	1230/0830	**		US	Import/Export Price Index
14/10/2022	1230/0830	**		US	WASDE Weekly Import/Export
14/10/2022	1400/1000	*		US	Business Inventories
14/10/2022	1400/1000	***		US	University of Michigan Sentiment Index (p)
14/10/2022	1400/1000			US	Kansas City Fed's Esther George
14/10/2022	1430/1030			US	Fed Governor Lisa Cook
15/10/2022	-			IT	Italy Due to Submit Draft Plan for 2023 Budget
15/10/2022	1300/1400			UK	BOE Bailey Opens/Panels Group of Thirty Seminar
15/10/2022	1715/1915			EU	ECB Lane Panels Annual RBWC Event
15/10/2022	1715/1315			US	St. Louis Fed's James Bullard