US OUTLOOK/OPINION: Fed's Waller, Sept Retail Sales Highlight Next Week's Agenda
Two key events to watch next week in the US:
While Monday is a US holiday for cash bond markets, Fed Governor Waller's speech on the economic outlook at 1500ET will garner attention for any updated views on the rate cut outlook. His last public appearance, which came immediately after the September FOMC meeting, was perceived quite dovishly for his seeming openness to another 50bp cut in November were the labor market to worsen or inflation to come in softer than expected.
- Since then, a strong September nonfarm payrolls report and an upside surprise in September CPI have seen markets price out a 50bp cut, and even put a pause into play - any commentary from Waller about potential a November "skip" will be closely eyed.
The Advance Retail Sales report for September (Thursday) is the highlight of the coming week's US data calendar, and will provide a key update on consumer activity at the end of Q3. Consensus expectations are for a pickup in overall sales growth (to 0.3% M/M, vs 0.1% in Aug).
- Countervailing factors include a potential pickup in the single largest retail category - auto sales - after a soft August, while gasoline stations are likely to see another pullback on the back of lower pump prices (all figures are nominal, not price-adjusted).
- The key "control group" will be most closely eyed as an input to the quarterly GDP calculations, and is seen rising 0.4% (vs 0.3% in Aug), with a strong figure potentially weighing against the case for a Fed cut in November.