The markets are not pricing in much chance for hike until perhaps after March

26 October, 2015

The markets are not pricing in much chance for hike until perhaps after March

Main Macro Events This Week

• United States: FOMC meeting is scheduled for Wednesday. No changes are expected at this week’s FOMC meeting, especially after China’s rate cut and further QE comments from the ECB last week. The markets are not pricing in much chance for hike until perhaps after March. If Fed policymakers were worried about growth and prices at last month’s meeting, they can not be encouraged by the recent downbeat developments about global growth. The firming in the dollar will only make it more difficult for the FED Committee to be confident in meeting its price mandate anytime soon too, which likely rules out action at the December meeting. Economic data this week will show an economy that continues to expand, but at a slower pace in Q3 as the Advance Q3 GDP release is seen slowing to a 1.7% pace from the 3.9% growth rate in Q2. Another weak durable orders report is projected: September orders are seen falling 1.0% after the 2.3% drop in August. The ECI will accelerate to a 0.6% growth rate in Q3, according to the survey median, from the 0.2% gain in Q2.

• Europe: A heavy data week in the Eurozone that will focus on October confidence readings and preliminary inflation numbers. PMI readings came in better than expected, which means there is some room for upside surprises. French and Italian PPI, German import prices, German retail sales, French consumer spending and Italian business confidence. The German Ifo Business Climate (Monday) is seen falling to 108.1 (median 107.8) from 108.5, led by a drop in the current conditions indicator following the slump in orders. Eurozone ESI Economic Confidence (Thursday) meanwhile is expected to ease slightly to 105.3 (median 105.1) from 105.6 following the mixed leads from better than expected PMI reading and the marked drop in the preliminary consumer confidence figure. The latter is likely to be followed by another decline in German GfK Consumer Confidence to 9.4 (median same) from 9.6.

• United Kingdom: This weeks U.K. data brings the October CBI industrial trends survey (Monday), the first estimate of Q3 GDP (Tuesday), the monthly batch of BoE lending data (Thursday), the CBI distributive sales survey (also Thursday), and, finally, the October Gfk consumer confidence survey (Friday). The main market focus will be clearer picture of moderate growth in Q3, strong mortgage lending and rising lending to businesses, along with an uptick in consumer confidence. It is also anticipate that the CBI surveys will show some moderation, correcting in the case of the sales sector poll following a very strong number in September.

• Japan: Japan month end data could set up the for the BoJ to consider its next QQE stimulus on Friday, following the ECB and PBoC rate cuts. Bank of Japan data this week includes, retail sales, personal income and consumption, and employment data. September services PPI (Tuesday) is expected to ease to 0.6% y/y from 0.7%. September retail sales (Wednesday) are forecast to fall to 1.0% y/y from the prior 1.8% for large retailers, and dip to 0.5% y/y from 0.8% for total retail sales. The balance of the calendar comes on Friday, and includes September national CPI, expected to fall to -0.1% y/y from 0.2% on a headline basis, and to -0.3% y/y from -0.1% on a core basis. October Tokyo CPI is seen unchanged at -0.1% y/y for headline, and unchanged at -0.2% for the core reading. September unemployment is seen steady at 3.4%, as is the job offers/seekers ratio at 1.23. September personal income is forecast at 1.0% y/y from 2.2% previously, with PCE expected to fall to 1.0% y/y from 2.9% in August. September housing starts are penciled in at a 4.0% y/y rise, from 8.8% in August. September construction orders are also due. The BoJ meets Friday, and following China’s lead last week, it’s expected that the Bank to increase its prior JPY 80 tln QE efforts to JPY 100 tln, taking the monetary base target to JPY 345 tln from JPY 325 tln.

• China: China’s calendar is light, with just September leading indicators set for Thursday.

• Australia: Australia’s calendar of economic data this week. The Q3 CPI (Tuesday) is seen expanding at a 0.6% pace (q/q, sa) after the 0.7% growth rate in Q2. The Q3 PPI (Thursday) is expected to gain 0.2% (q/q, sa) after the 0.3% gain in Q2. Trade prices (Wednesday) are expected to reveal a 0.8% gain (q/q, sa) for Q3 import prices and a 0.8% increase in import prices. There are no speakers from the RBA this week. The RBA meets on November 3, and its expected no change to the current 2.00% policy setting.

• New Zealand: New Zealand’s calendar has the RBNZ announcement (Thursday). It is a close call between no change and a cut, but its expected a 25 basis point reduction to 2.50% as the bank continues to lean against strong external headwinds. The trade deficit (Wednesday) is projected to narrow to -NZ$1.000 bln in September from -NZ$1.035 bln in August.


Source link  
FOMC said inflation will rise to 2% over the medium term

Asian stock markets mostly headed south ( Nikkei closed own -1.22% at 18, 914) ongoing concerns about am emerging global trade war, and as the dollar weakened after the Fed failed to signal a rate hike as early as March, which some expected after yesterday’s data round...

Asian markets were mixed overnight

US data reports: revealed modest shortfalls across the Q4 ECI data and the January figures for consumer confidence and Chicago PMI, though the shortfalls did nothing to change the outlook for GDP growth of 2.0% in Q1 after a 1.9% Q4 rise. A 0.5% Q4 U.S...

The selloff in equities continued in Asia overnight

The U.S. income report revealed a 0.3% December income rise after a small November boost that tracked assumptions, but a firm 0.5% consumption increase with a solid 0.3% real rise that modestly beat estimates...


Politics will remain omnipresent near term

This week’s heavy data slate is loaded with key releases, headlined by Friday’s January nonfarm payroll report. Jobs are forecast rising 190k after the disappointing 156k December increase...

Main Macro Events This Week

President Trump has his feet under the desk in the Oval office and the tone of his inaugural speech and actions over the weekend reiterated his campaign themes to Make America Great Again...

U.S. reports revealed a hefty 0.8% December industrial production

Asian stock markets traded mixed, with Japan and ASX moving higher, as Fed’s Yellen said she expects to hike rates few times a year through 2019 to 3% neutral rate...


Stock markets headed south in Asia overnight

Trump conducted a test of the intelligence community by having a meeting with those agencies without letting any of his staff know and news of that meeting was subsequently leaked, he said...

The year is only a week old

Though the December U.S. jobs report was largely plain vanilla, it was good enough to support rising animal spirits. The surprise headliner of the report, however, was the 0.4% surge in earnings, which caught the markets attention...

US stocks had a quiet day

USD fell back again overnight. Canada, Australia, New Zealand and Hong Kong are all back from the extended Christmas holiday, but trading volumes are likely to remain thin for the rest of the week...

  


Share: