Week Ahead

The earnings season enters its busiest phase in the coming week, with Apple, Facebook, Microsoft, Alphabet and Amazon reporting quarterly results; while central banks in the Euro Area, Japan, Canada and Brazil will be deciding on monetary policy. On the economic data front, the US is releasing the first estimate of Q3 GDP, alongside durable goods orders, and personal income and outlays.

Other GDP updates to follow include those from the Eurozone, Sweden, Mexico and South Korea. The bloc’s business survey and inflation will also be keenly watched, as well as Japan retail sales and industrial production, China NBS PMI survey, and Australia Q3 inflation data. Elsewhere, UK Chancellor Rishi Sunak will be revealing his Autumn budget.

In the United States, the advance estimate of GDP will probably show a slowdown in economic recovery during the third quarter of the year, as stimulus spending and a reopening-fueled burst of activity cooled amid growing inflationary pressure, persistent supply chain issues and rising COVID-19 cases. The world’s largest economy is seen growing by an annualized 2.5 percent during July to September, following a 6.7 percent expansion seen in the previous three-month period. Other notable publications include: personal income and outlays; PCE price index; durable goods orders; third-quarter employment cost index; CB consumer confidence; new and pending home sales; Chicago Fed National Activity Index; Dallas Fed Manufacturing Index; Case-Shiller home prices; Chicago PMI; the advance estimates of goods trade balance and wholesale inventories; and the final reading of Michigan consumer sentiment.

Traders also prepare for the busiest week of earnings season, with focus turning to reports from big firms including Apple, Alphabet, Amazon, Microsoft, Facebook, Twitter, Alibaba, CME Group, 3M, Caterpillar, Spotify, Gilead Sciences, Merck & Co, Mastercard, Visa, McDonald’s, Coca-Cola, Starbucks, Boeing, General Electric, General Motors, Ford Motor, Boeing, Exxon Mobil and Chevron.

Elsewhere in America, the Bank of Canada is likely to leave interest rates at record-low levels when it meets on Wednesday, while policymakers in Brazil are seen hiking interest rates again to curb rising inflation. Economic data to follow include Canada monthly GDP, the preliminary estimate of wholesale sales, and the final reading of producer prices; Mexico third-quarter GDP, trade balance, jobless rate and economic activity; and Brazil unemployment and consumer morale.

Across the Atlantic, all eyes turn to UK Chancellor Rishi Sunak’s Autumn budget due Wednesday, which will probably reveal plans to support public services and revive the economy amid prospects of slower growth, rising inflation and interest rates, and an unravelling energy crisis. On the economic data front, Britain’s main releases include Bank of England’s monetary indicators, Nationwide house prices, CBI distributive trades, and car production.

Elsewhere in Europe, the ECB will be deciding on monetary policy, with markets anticipating no changes in borrowing costs as ECB President Lagarde has been reiterating that the recent spike in inflation is temporary. Key economic releases include GDP and inflation reports for the Eurozone, with forecasts suggesting the bloc’s economy likely slowed during July-September amid an energy crunch and supply-chain snarls, while consumer prices likely rose the most for over 13 years. Investors will also keep an eye on the Eurozone business survey; Germany business and consumer confidence, and jobless rate; Sweden third-quarter GDP; Switzerland KOF leading indicators; and Turkey foreign trade and business morale.

In Asia, the Bank of Japan is expected to keep its policy interest rate at -0.1 percent when it holds a meeting on October 27-28. Key economic data include retail sales, industrial production, consumer confidence, jobless rate, housing starts and Tokyo CPI. In China, data to watch for include the NBS PMI survey and industrial profits; while in South Korea, third-quarter GDP, business and consumer morale, industrial output and retail trade will be in the spotlight.

Elsewhere, investors will turn their attention to Australia’s third-quarter consumer price inflation, producer and foreign trade prices, as well as the preliminary reading of retail sales; and New Zealand’s trade balance.

Categories: Markten