Events to Look Out for Next Week

Andria Pichidi

October 21, 2022

A gigantic Week ahead! Politics, Central banks and Earnings still on! BoC, ECB and BoJ monetary policy meetings are on the agenda along with earnings reports from tech giants such as Microsoft, Apple, Meta, Alphabet and Amazon. Chaos in the UK government is expected to continue as a new PM will be announced next week. Sunak front runner in race for Truss succession. Penny Mordaunt also seems to be a contender and Boris Johnson has cut his holiday short, fueling speculation that he is trying to make a comeback. The candidates will have to gather the support of 100 MPs by Monday 14:00 GMT to become an official candidate.

Have a look at the most important events of the coming days in our usual weekly publication.

Markit PMIs (EUR, GMT 07:30-08:00) – The preliminary Eurozone Composite October PMI is expected to have declined to 47.6 from 48.1, given a fall in both the Services and Manufacturing sectors in the Eurozone but also in its biggest economy Germany.
Markit PMIs (GBP, GMT 08:30) – The preliminary October Services PMI in the UK is expected at contraction at 49.6.
Manufacturing PMI (USD, GMT 13:45) – The preliminary Manufacturing PMI for October is expected at 51.1 from 52 while Services PMI is expected to have declined further in contraction to 45 from 49.3.
Treasury Secretary Yellen Speech (USD, GMT 15:00)

Tuesday – 25 October 2022

German IFO (EUR, GMT 08:00) – German IFO business confidence is expected to slip slightly to 92.9 in October after the jump seen in September to 93.4.
CB Consumer Confidence (USD, GMT 14:00) – Consumer confidence is expected to ease to 105.0 from 108.0 in September, versus a 17-month low of 95.7 in July. The present situation index is expected to slip to 143.8 from 149.6 in September, versus a 15-month low of 139.7 in July. The expectations index is expected to fall to 79.1 from 80.3 in September, versus a 9-year low of 65.3 in July.

Wednesday – 26 October 2022

Consumer Price Index (AUD, GMT 00:30) – Australian inflation data in Q3 is expected to ease a bit at 1.6% q/q from 1.8% q/q, with headline spiking to 7% y/y from 6.1% y/y, signalling that inflation pressure is still there.
Gross Domestic Product (CNY, GMT N/A) – After a week of delay, Chinese GDP for Q3 is expected to show growth of just 3.3%, far below the country’s long-term average and its 5.5% target for the year.
Interest Rate Decision and Conference (CAD, GMT 14:00) – The higher than expected inflation out of Canada for September this week presented that inflation is still very elevated, and barring the prior three months, this would have been the fastest pace in 39 years. The data suggest the BoC might decide to boost rates another 75 bps to 4.0% after the 75 bp hike in September to 3.25%, and the surprise jumbo 100 bps in July.

Thursday – 27 October 2022

Interest Rate Decision, Statement and Conference (EUR, GMT 12:15 & 12:45) – The ECB is widely expected to deliver another 75 basis point rate hike and lay the groundwork for at least another half point hike in December. This should bring rates near neutral levels. Beyond that, the discussion on the appropriate path will become more complex, especially if the expected recession is less mild than the ECB currently expects. We suspect decisions on QT will be shelved for now. As developments in the UK show, monetary policy will also depend on fiscal policies across the Eurozone over the coming months. There seems to be pretty broad agreement at the ECB that the remaining stimulus needs to be taken out as soon as possible. Another half point hike in December remains the main scenario, and this is also backed by the latest Reuters poll, which saw respondents predicting that deposit and refinancing rates seen would rise to 1.50% and 2.00% respectively next week and hit 2.00% and 2.50% by the end of the year.
Durable Goods & Gross Domestic Product (USD, GMT 12:30) – Durable goods orders are expected to rise 0.6% in September with a 1.0% transportation orders increase, after a -0.2% headline drop in August that included a -1.1% transportation orders decline. The Q3 GDP should grow to 2.0%, with a 3.4% growth pace for final sales but a -$66 bln inventory subtraction that leaves a pull-back in the inventory accumulation rate to $45 bln. The final sales increase will receive a big lift from net exports, which should add a hefty $169 bln to Q3 GDP growth, thanks to an estimated 14% growth pace for exports alongside an -8% pull-back in imports. Consumption spending should climb at a restrained 0.7% pace in Q3, as big price gains through 2022 have drained “real” household purchasing power.

Friday – 28 October 2022

Interest Rate Decision, Statement and Conference (JPY, GMT 02:30) – The BoJ conducted emergency bond buying operations for a 2nd time, as the 20-year government bond yield rose to a new high in a further challenge to the central bank’s resolve to defend its ultra-easy policy stance. Hence next week the BoJ is expected to stand on JPY weakness in its policy meeting but it is unlikely to trigger any changes in the BoJ’s policy stance.
Core PCE Price Index (USD, GMT 12:30) – US personal income is anticipated to rise to 0.4% in September after a 0.3% August gain and 0.5% in compensation after a 0.3% gain, given a 0.2% September increase for hours-worked and a 0.3% rise for hourly earnings.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.