MNI Global Week Ahead - US CPI Headlines
MNI (LONDON) - See below for the key events in Developed and Emerging Markets next week:
Developed Markets
WEDNESDAY - RBNZ Decision
The RBNZ meets on Wednesday October 9 and is widely expected to cut rates 50bp to 4.75% based off sell-side consensus. While Q2 GDP was stronger than the RBNZ expected in August, it still contracted. The monthly inflation data, which covers around 40% of the CPI, also signalled that it should return to the 1-3% band in Q3. In the past week survey data has reinforced the lower inflation trajectory. This decision won't include updated staff forecasts or a press conference.
WEDNESDAY - FOMC Minutes
The minutes to the September FOMC meeting (released Wednesday at 1400ET) could shed further light on the decision to semi-surprise markets with a 50bp vs a 25bp cut to begin the easing cycle. While the vast majority of participants have since commented that they supported the half-point cut, the meeting decision brought the first dissent from a Fed governor (Bowman) since 2005, and it will be interesting to get a gauge of how many non-voting members also opposed the outsized rate reduction. It's to be expected that the discussion over the future rate path will revolve around a data-dependent/meeting-by-meeting approach, but the characterization of the decision to cut 50bp will be of note in this context if there was a sense of falling behind the curve of labor market deterioration, and/or regret over not cutting 25bp in July. Was there more support on the Committee to get to neutral quickly due to policy being far too restrictive, or for the front-loaded 50bp being a pure "recalibration", with the bar to sizeable future easing set a little higher?
THURSDAY - US CPI
Inflation data arguably carry more weight again after the widespread strength of the September payrolls report, with Fed Funds pricing swinging close to a 25bp cut with the Nov 7 FOMC decision vs 34bp beforehand. Enter Thursday’s CPI and Friday’s PPI, which will inform estimates for core PCE inflation (Oct 31) in the last main inflation release before the meeting. Core CPI is currently seen printing 0.2% M/M in September after it surprised higher with 0.28% M/M in August prior to which it saw three months averaging just 0.13% M/M. Details will continue to matter when it comes to core PCE implications, with the latter running at a below-target 1.8% annualized over the four months to August for its lowest since late 2020 to offer some minor undershooting risk. It will likely take a large downside surprise to sway markets back towards greater odds of a second 50bp cut from the Fed. There is also still another payrolls report to be seen before the Nov FOMC, which sees added importance again now that it's less likely to be distorted by strike impact with the dockworkers restarting work.
FRIDAY - Canada Jobs Report
The main Canadian events are firmly backloaded this week, with both the labour force survey for September and the BoC’s quarterly business and consumer surveys for Q3 on Friday. The September CPI report is still to land the following week on Oct 15, but these are otherwise the last major releases before the BoC decision on Oct 23. Markets have attributed sizeable risk of a 50bp cut from the Bank this month since the Fed started its easing cycle with a 50bp move, with OIS currently pricing 38bp. Early days for consensus see the unemployment rate unchanged at 6.6% and we think it would need to see a further increase to warrant an upsizing from its previous pace of 25bp cuts at the past three meetings. Aside from the current focus on the extent to which increased supply is driving changes in the unemployment rate, we also watch the extent to which full-time employment recovered after a heavy -44k in August.
THROUGH THE WEEK - US Q3 Earnings Season
Earnings season informally begins with Pepsi's midweek report on Wednesday, before the cycle begins in earnest on Friday. Key names set to report include BlackRock, Wells Fargo and JP Morgan. Unfortunately for net interest margins, the Fed's first rate cut since the pandemic will have come too late in the quarter to provide any material relief for banks - leaving initial focus on FICC revenues and general cost reduction. Desk performance will have been supported by acute volatility across stock markets in August, while lenders will be eyed for any response in originations after the sharp pullback in mortgage rates over the summer.
Emerging Markets
WEDNESDAY - RBI Decision (India)
FRIDAY - BOK Decision (South Korea)
FRIDAY - BCRP Decision (Peru)
Following the soft September CPI data, the BCRP is widely expected to deliver another 25bp cut to 5.0% next week. Headline inflation fell to its lowest level since October 2020, while core prices have shown no variation over the last two months, giving policymakers ample room to continue with their gradual easing cycle.
Date | GMT/Local | Impact | Country | Event |
07/10/2024 | 0600/0800 | ** | DE | Manufacturing Orders |
07/10/2024 | 0700/0900 | EU | ECB's Cipollone at Deutsche Bundesbank's Symposium | |
07/10/2024 | 0745/0945 | EU | ECB's Lane speech at ECB MonPol conference | |
07/10/2024 | 0900/1100 | ** | EU | Retail Sales |
07/10/2024 | - | EU | ECB's Lagarde & Cipollone in Eurogroup meeting | |
07/10/2024 | 1530/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
07/10/2024 | 1530/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
07/10/2024 | 1700/1300 | US | Fed Governor Michelle Bowman | |
07/10/2024 | 1750/1350 | US | Minneapolis Fed's Neel Kashkari | |
07/10/2024 | 1900/1500 | * | US | Consumer Credit |
07/10/2024 | 2200/1800 | US | Atlanta Fed's Raphael Bostic | |
07/10/2024 | 2230/1830 | US | St. Louis Fed's Alberto Musalem | |
08/10/2024 | 2301/0001 | * | GB | BRC-KPMG Shop Sales Monitor |
08/10/2024 | 2330/0830 | ** | JP | average wages (p) |
08/10/2024 | 2330/0830 | ** | JP | Household spending |
08/10/2024 | 0500/1400 | JP | Economy Watchers Survey | |
08/10/2024 | 0600/0800 | ** | DE | Industrial Production |
08/10/2024 | 0600/0800 | SE | Flash CPI | |
08/10/2024 | 0645/0845 | * | FR | Foreign Trade |
08/10/2024 | 0700/0900 | EU | ECB's Schnabel chairing ECB MonPol session | |
08/10/2024 | 0700/0300 | US | Fed Governor Adriana Kugler | |
08/10/2024 | 0900/1000 | * | GB | Index Linked Gilt Outright Auction Result |
08/10/2024 | 1000/0600 | ** | US | NFIB Small Business Optimism Index |
08/10/2024 | - | EU | ECB's de Guindos at ECOFIN meeting | |
08/10/2024 | 1230/0830 | ** | US | Trade Balance |
08/10/2024 | 1230/0830 | ** | CA | International Merchandise Trade (Trade Balance) |
08/10/2024 | 1255/0855 | ** | US | Redbook Retail Sales Index |
08/10/2024 | 1530/1130 | * | US | US Treasury Auction Result for Cash Management Bill |
08/10/2024 | 1645/1245 | US | Atlanta Fed's Raphael Bostic | |
08/10/2024 | 1700/1300 | *** | US | US Note 03 Year Treasury Auction Result |
08/10/2024 | 2000/1600 | US | Boston Fed's Susan Collins | |
09/10/2024 | - | NZ | Reserve Bank of New Zealand Meeting | |
08/10/2024 | 2330/1930 | US | Fed Vice Chair Philip Jefferson | |
09/10/2024 | 0030/1130 | * | AU | Building Approvals |
09/10/2024 | 0100/1400 | *** | NZ | RBNZ official cash rate decision |
09/10/2024 | 0600/0800 | ** | DE | Trade Balance |
09/10/2024 | 0830/1030 | EU | ECB's Elderson in 'true cost of green...' session | |
09/10/2024 | 0900/1000 | ** | GB | Gilt Outright Auction Result |
09/10/2024 | 1100/0700 | ** | US | MBA Weekly Applications Index |
09/10/2024 | 1200/0800 | US | Atlanta Fed's Raphael Bostic | |
09/10/2024 | 1315/0915 | US | Dallas Fed's Lorie Logan | |
09/10/2024 | 1400/1000 | ** | US | Wholesale Trade |
09/10/2024 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
09/10/2024 | 1630/1230 | US | Fed Vice Chair Philip Jefferson | |
09/10/2024 | 1700/1300 | ** | US | US Note 10 Year Treasury Auction Result |
09/10/2024 | 1800/1400 | *** | US | FOMC Minutes |
09/10/2024 | 2100/1700 | US | Boston Fed's Susan Collins | |
09/10/2024 | 2200/1800 | US | San Francisco Fed's Mary Daly | |
10/10/2024 | 0600/0800 | *** | NO | CPI Norway |
10/10/2024 | 0600/0800 | ** | SE | Private Sector Production m/m |
10/10/2024 | 0600/0800 | ** | DE | Retail Sales |
10/10/2024 | 0800/1000 | * | IT | Industrial Production |
10/10/2024 | - | *** | CN | Money Supply |
10/10/2024 | - | *** | CN | New Loans |
10/10/2024 | - | *** | CN | Social Financing |
10/10/2024 | 1230/0830 | *** | US | Jobless Claims |
10/10/2024 | 1230/0830 | ** | US | WASDE Weekly Import/Export |
10/10/2024 | 1230/0830 | *** | US | CPI |
10/10/2024 | 1315/0915 | US | Fed Governor Lisa Cook | |
10/10/2024 | 1430/1030 | ** | US | Natural Gas Stocks |
10/10/2024 | 1430/1030 | US | Richmond Fed's Tom Barkin | |
10/10/2024 | 1500/1100 | US | New York Fed's John Williams | |
10/10/2024 | 1700/1300 | *** | US | US Treasury Auction Result for 30 Year Bond |
10/10/2024 | 1800/1400 | ** | US | Treasury Budget |
11/10/2024 | 0600/0700 | ** | GB | UK Monthly GDP |
11/10/2024 | 0600/0700 | ** | GB | Trade Balance |
11/10/2024 | 0600/0700 | ** | GB | Index of Services |
11/10/2024 | 0600/0700 | *** | GB | Index of Production |
11/10/2024 | 0600/0700 | ** | GB | Output in the Construction Industry |
11/10/2024 | 0600/0800 | *** | DE | HICP (f) |
11/10/2024 | 1230/0830 | *** | US | PPI |
11/10/2024 | 1230/0830 | * | CA | Building Permits |
11/10/2024 | 1230/0830 | *** | CA | Labour Force Survey |
11/10/2024 | 1345/0945 | US | Chicago Fed's Austan Goolsbee | |
11/10/2024 | 1400/1000 | ** | US | U. Mich. Survey of Consumers |
11/10/2024 | 1430/1030 | ** | CA | BOC Business Outlook Survey |
11/10/2024 | 1445/1045 | US | Dallas Fed's Lorie Logan | |
11/10/2024 | 1600/1200 | *** | US | USDA Crop Estimates - WASDE |
11/10/2024 | 1710/1310 | US | Fed Governor Michelle Bowman |