The Nonfarm payrolls surprise once again with a strong pop which will increase risks for further Fed tightening this year and will push back rate cuts further into 2024. Futures were sunk by the data, while US Dollar and Yields rocketed higher. That said the hot jobs report puts another Fed hike on the table November and it increases the importance of next week’s CPI inflation reports.
Monday – 09 October 2023
FOMC Member Barr, Logan and Jefferson and BOE MPC Member Mann Speeches
Tuesday – 10 October 2023
Building Approvals (AUD, GMT 00:30) – The September Building Approvals in Australia is expected to grow by 7% from contractinf by -8.1% last month.
FPC Meeting Minutes & Statement (GMT, GBP N/A) – A detailed record of the BOE Financial Policy Committee’s most recent meeting, providing in-depth insights into the financial conditions, powers for direction on capital requirements, and decisions towards financial stability.
FOMC Member Waller and Kashkari Speeches
Wednesday – 11 October 2023
Consumer Price Index (EUR, GMT 06:00) – The German consumer price index is expected unchanged for August but headline slowing down to 4.5 % from 6.1%. However it is too early to suggets that Eurozones inflation pressures have peaked.
Producer Price Index (USD, GMT 12:30) – September’s PPI should gain by 0.4% for the headline and 0.2% for the core, after August increases of 0.7% for the headline and 0.2% for the core. As expected readings would result in the y/y headline PPI metric rising to 1.7% from 1.6%, versus an all-time high of 11.7% in March of 2022. We expect the y/y core measure to hold at 2.2% from August, versus an all-time high 9.7% in March of 2022. Overall, the massive PPI climb since the start of 2021 exceeded the uptrend in headline and core CPI data, and both sets of gains chased outsized increases in the trade price measures. Now as prices unwind, the trade price measures have fallen sharply, with ensuing weakness in PPI and CPI that will extend into 2024.
FOMC Meeting Minutes (USD, GMT 18:00) – The OPEC meeting will be held in Vienna and is attended by representatives from 15 oil-rich nations.
FOMC Member Waller and Bowman Speeches
Thursday – 12 October 2023
ECB Monetary Policy Meeting Accounts (EUR, GMT 11:30) – The ECB Monetary Policy Meeting Accounts provide information with regards to the policymakers’ rationale behind their decisions. So far the ECB has maintained a tightening bias, and the official line remains the “wait and see mode,” and while the door to additional tightening has been left ajar, it is pretty clear now that in the central scenario rates have peaked.
Consumer Price Index (USD, GMT 12:30) – The September’s inflation expected at 0.2% for the headline and 0.3% for the core in September, after August gains of 0.6% for the headline and 0.3% for the core. CPI gasoline prices look poised to rise 1.4% in September. We expect dissipating upward pressure on core prices into 2024 as disruptions subside from global supply chain bottlenecks and the war in Ukraine. As-expected September CPI figures would result in a y/y headline decline to 3.5% from 3.7% in August, versus a 40-year high of 9.1% in June ’22. We expect the core y/y gain to slow to 4.1% from 4.3% in August, versus a 40-year high of 6.6% in September. We expect a persistent moderation in y/y gains for all the inflation gauges into 2024 that will trim pressure on the Fed to tighten monetary conditions.
Friday – 13 October 2023
Inflation, Producer Price Index and Trade Balance (CNY, GMT 01:30 & 03:00) – The headline Chinese inflation for September is expected at 0.2% from 0.1%, while PPI is seen contracting at -2.4% from -3%. The trade surplus is expected to 70 bln from 68.36 bln.
BOE Governor Bailey Speech (GBP, GMT 08:00)
FOMC Member Harker and ECB President Lagarde Speeches (EUR & USD, GMT 13:00)
Michigan Sentiment (USD, GMT 14:00) – The final Michigan sentiment report revealed an upwardly revised headline drop to 68.1 (was 67.7) from 69.5 in August and a 2-year high of 71.6 in July.
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Andria Pichidi
Market Analyst
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