Week Ahead

In the US, GDP growth for Q3 will be in the spotlight next week, alongside personal income and outlays and durable goods orders. The earnings season continues, with Alphabet, Apple, Amazon and Facebook due to report their quarterly results. Elsewhere, the ECB and the BoJ will announce their monetary policy decisions. Traders will also monitor China’s Communist Party Congress and any further development in Brexit negotiations.

The advance estimate of US GDP will probably show the world’s largest economy grew by an annualized 30.8 percent during the July to September period, the fastest pace of expansion since comparable records began in 1947 and compared to a record contraction in the second quarter of the year. Domestic demand and business activity rebounded from previous slumps following the relaxation of coronavirus-induced restrictions, while external demand also showed signs of recovery. 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.

Investors will also be closely monitoring the busiest week of the earnings season, with focus turning to reports from big firms including Alphabet, Apple, Amazon, Facebook, 3M, Spotify, Pfizer, Gilead Sciences, Merck, General Electric, Ford, Boeing, Caterpillar, Mastercard, Visa, Exxon Mobil and Chevron.

Elsewhere in America, central banks in Canada, Brazil and Colombia are seen holding interest rates at record low levels. Other important data to follow include Canada monthly GDP and producer prices; Mexico third-quarter GDP and trade balance; and Brazil jobless rate.

In the UK, investors will keep an eye on mortgage approvals, nationwide housing prices, CBI distributive trades, new car sales and Bank of England’s monetary indicators.

Elsewhere in Europe, the ECB will be deciding on monetary policy, with markets anticipating no changes in borrowing costs but waiting to see whether a further stimulus announcement is on the way as Europe is battling the second wave of the coronavirus infections, with several countries implementing new restrictive measures. On the economic data front, key releases include GDP, unemployment and inflation reports for the Eurozone, Germany, France, Italy and Spain. The eurozone’s economy will likely rebound from its steepest contraction on record in Q3, but the bloc is expected to remain in deflationary territory for a third month in October and the jobless rate is seen accelerating to an over two-year high in September. Investors will also keep an eye on the Eurozone business survey, Germany Ifo business climate and retail sales; Switzerland KOF leading indicators and retail sales; and Turkey foreign trade and business morale.

In Asia, all eyes are on China’s Fifth Plenum of the Nineteenth Communist Party Congress, with analysts focusing on the country’s five-year economic and social plan. Traders will also turn their attention to October’s manufacturing and non-manufacturing PMIs update from the NBS and industrial profits.

The Bank of Japan will have its monetary policy meeting, but no changes are expected. The quarterly outlook report from the Bank, retail sales, consumer confidence, unemployment rate, industrial production September’s preliminary reading, housing starts, Tokyo inflation, and the final reading of August’s leading economic index will also be in the spotlight.

Other highlights for the Asia-Pacific region include: South Korea, Taiwan and Hong Kong Q3 GDP advance estimate; South Korea consumer and business confidence, industrial production and retail sales; Australia Q3 consumer and producer prices; New Zealand trade balance, ANZ business confidence and Roy Morgan consumer confidence; Singapore industrial output and Q3 unemployment rate; and trade balance for Hong Kong and Malaysia.