The Week Ahead: Highlights

Asia-Pacific Preview

China GDP, Industrial Production in Focus

By Brian Jackson, Econoday Economist

Chinas quarterly GDP release and monthly activity data for the three months to September will be the focus in the Asia-Pacific region. GDP growth slowed to a two-year low in the three months to June, largely reflecting the initiial impact of the Iran conflict. Official monthly activity data and PMI surveys indicate that conditions remained subdued in the three months to September, with officials noting last month that "the adverse impact of the external environment has intensified". GDP data will be accompanied by monthly data for September, with the official PMI survey published earlier in the month indicating close to zero growth in both the manufacturing and non-manufacturing sector. Next weeks data will also be accompanied by officials updated assessment of conditions and policy settings ahead of the Peoples Bank of Chinas monthly review of loan prime rates.

The Bank of Koreas policy meeting is also scheduled in the week ahead. Officials increased policy rates in both of their previous two meetings, in mid-July and late August. They expect inflation to remain above their two percent target "for a considerable time. Exchange rate volatility and strong house price growth in Seoul were also cited as factors supporting the case for tighter policy. Officials advised in August that further rate hikes are likely in upcoming meetings, but CPI data released earlier this month showed both headline and core inflation moderated in September. Although another rate hike may be considered, the September inflation data may provide scope for officials to wait for more information before hiking rates again.

New Zealand inflation data will shape expectations for the Reserve Bank of New Zealand policy meeting later this month. Headline inflation rose from 3.5 percent to 4.1 percent in the three months to June. This is the biggest increase in consumer prices since late 2023 and takes the headline inflation rate well above the top of the RBNZ's target range of 1.0 percent to 3.0 percent. RBNZ officials have also increased policy rates in each of their two previous meetings and advised that further policy tightening is likely in the near term. Next weeks data would likely need to show a sharp moderation in price pressures to shift the policy outlook.

Elsewhere in the region, Singapore and Hong Kong will report inflation data for September, while Taiwan will report industrial production data. Flash PMI survey data from India will give an early indication of October conditions.

US Preview

Regional Fed Reports to Give Early Read on October Business Conditions

By Theresa Sheehan, Econoday Economist

The communications blackout period around the October 27-28 FOMC meeting goes into effect at midnight on Saturday, October 17 and runs through midnight on Thursday, October 29. As a result, Fed policymakers will not be providing public remarks on monetary policy during the week. The most important data in the week is likely to be relatively minor indicators that reflect conditions in early October.

The NAHB/Wells Fargo housing market index for October at 10:00 ET on Monday will show how pessimistic homebuilders are with mortgage rates running in the mid-7 percent range for a fixed rate mortgage. Gloomy consumers worried about inflation, interest rates, and jobs are not heading into the market for a new home, or an existing home for that matter. Whether a home purchase is affordable at present is an issue for buyers, but also whether buyers will continue to be able to meet the payments.

How the manufacturing and service sectors are faring in October will weigh on the FOMC decision.

The manufacturing indexes for New York and Philadelphia have already been released and point to modest-to-moderate expansion. The week sees the Richmond manufacturing index at 10:00 ET on Tuesday, Chicago manufacturing index at 8:30 ET on Thursday, and Kansas City at 11:00 ET on Thursday. Richmonds composite index has been running just above neutral while Kansas Citys has been on the rise to tempered expansion. The Dallas Feds manufacturing index is not until Monday, October 26 at 10:30 ET. The Chicago index indicates weaker conditions in the last few months.

The indexes for the service sector in October will include Philadelphia at 8:30 ET on Tuesday, Richmond at 10:00 ET on Tuesday, Chicago at 8:30 ET on Thursday, and Kansas City at 11:00 ET on Friday. The Dallas Fed service sector survey is set for release at 10:30 ET on Tuesday, October 27. Conditions for service sector are uneven due to the great variety of businesses. Broadly speaking, the indexes are trending in a narrow range around the neutral mark as they work to adapt to chaotic policy out of the federal government, inflation, and a limited labor pool of skilled workers.

The Week Ahead: Econoday Consensus Forecasts

Monday

China Fixed Asset Investment for September (Mon 1000 CST; Mon 0200 GMT; Sun 2200 EDT)

Consensus Forecast, Year to Date on Y/Y Basis: -7.25%

Consensus Range, Year to Date on Y/Y Basis: -7.65% to -7.3%

Fixed asset investment continues contracting with the consensus looking for a decline of 7.25 percent on year in September, worse than the 7.2 percent decrease in August.

China GDP for Third Quarter (Mon 1000 CST; Mon 0200 GMT; Sun 2200 EDT)

Consensus Forecast, Q/Q: 1.0%

Consensus Range, Q/Q: 0.7% to 1.1%

Consensus Forecast, Y/Y: 4.4%

Consensus Range, Y/Y: 4.0% to 5.2%

GDP expected to edge up to 4.4 percent rate on year in Q3 from 4.3 percent in Q2 with help from net exports.

China Industrial Production for September (Mon 1000 CST; Mon 0200 GMT; Sun 2200 EDT)

Consensus Forecast, Y/Y: 5.4%

Consensus Range, Y/Y: 4.8% to 5.5%

Industrial production expected to improve to a 5.4 percent annual increase in September from 5.2 percent in August.

China Retail Sales for September (Mon 1000 CST; Mon 0200 GMT; Sun 2200 EDT)

Consensus Forecast, Y/Y: 0.5%

Consensus Range, Y/Y: 0.1% to 1.0%

The consensus sees annual sales growth edging up to 0.5 percent in September from 0.4 percent in August.

Canada CPI for September (Mon 0830 EDT; Mon 1230 GMT)

Consensus Forecast, CPI - M/M: 0.2%

Consensus Range, CPI - M/M: 0.0% to 0.4%

Consensus Forecast, CPI - Y/Y: 3.2%

Consensus Range, CPI - Y/Y: 3.0% to 3.3%

Consensus Forecast, Core CPI - M/M: 0.2%

Consensus Range, Core CPI - M/M: 0.2% to 0.2%

Consensus Forecast, Core CPI - Y/Y: 2.1%

Consensus Range, Core CPI - Y/Y: 2.0% to 2.4%

CPI is expected to show the effect of increasing energy prices while food prices fall back. The consensus sees total CPI up 3.2 percent on year versus 3.0 percent in August. The core is seen flat at 2.1 percent with not much spillover from energy into other segments yet but everyone is watching airfares.

US Housing Market Index for October (Mon 1000 EDT; Mon 1400 GMT)

Consensus Forecast, Index: 31

Consensus Range, Index: 30 to 32

Builder sentiment remains gloomy amid rising mortgage rates. Consensus expectations call for the index down to 31 for October from an already depressed 32 in September.

Tuesday

China Loan Prime Rate for October (Tue 0915 CST; Tue 0115 GMT; Mon 2115 EDT)

Consensus Forecast, 1-Year Rate - Change: 0 bp

Consensus Range, 1-Year Rate - Change: 0 bp to 0 bp

Consensus Forecast, 1-Year Rate - Level: 3.0%

Consensus Range, 1-Year Rate - Level: 3.0% to 3.0%

Consensus Forecast, 5-Year Rate - Change: 0 bp

Consensus Range, 5-Year Rate - Change: 0 bp to 0 bp

Consensus Forecast, 5-Year Rate - Level: 3.50%

Consensus Range, 5-Year Rate - Level: 3.50% to 3.50%

Chinese authorities continue to rely on fiscal measures rather than rate cuts to boost the economy so no change expected from the PBOC on loan prime rates.

UK Labour Market Report for October (Tue 0700 BST; Tue 0600 GMT; Tue 0200 EDT)

Consensus Forecast, ILO Unemployment Rate: 5.0%

Consensus Range, ILO Unemployment Rate: 4.9% to 5.0%

Consensus Forecast, Average Earnings - Y/Y: 3.8%

Consensus Range, Average Earnings - Y/Y: 3.6% to 3.8%

ILO unemployment expected up to 5.0 percent in October from 4.9 percent in September with earnings growth down to 3.8 percent from 3.9 percent.

Germany PPI for September (Tue 0800 CEST; Tue 0600 GMT; Tue 0200 EDT)

Consensus Forecast, M/M: 1.6%

Consensus Range, M/M: 0.3% to 2.0%

Consensus Forecast, Y/Y: 6.3%

Consensus Range, Y/Y: 5.0% to 6.4%

Energy prices are seen fueling a whopping 1.6 percent increase in PPI on the month!

Germany ZEW Survey for October (Tue 1100 CEST; Tue 0900 GMT; Tue 0500 EDT)

Consensus Forecast, Economic Sentiment: 30.0

Consensus Range, Economic Sentiment: 25.1 to 33.0

Sentiment expected to fade to 30.0 in October from 34.7 in September.

US Housing Starts and Permits for September (Tue 0830 EDT; Tue 1230 GMT)

Consensus Forecast, Starts - Annual Rate: 1.305 M

Consensus Range, Starts - Annual Rate: 1.250 M to 1.330 M

Consensus Forecast, Permits - Annual Rate: 1.385 M

Consensus Range, Permits - Annual Rate: 1.380 M to 1.391 M

Starts expected to recover to 1.305 million from 1.275 million in August but remain weak as affordability remains problematic.

US Pending Home Sales Index for September (Tue 1000 EDT; Tue 1400 GMT)

Consensus Forecast, M/M: 0.1%

Consensus Range, M/M: -0.5% to 0.5%

Home sales seen effectively flat with pending home sales limited by high mortgage rates.

Wednesday

Japan Merchandise Trade for September (Wed 0850 JST; Tue 2350 GMT; Tue 1950 EDT)

Consensus Forecast, Balance: -78.00 B

Consensus Range, Balance: -368.90 B to 45.30 B

Consensus Forecast, Imports - Y/Y: 19.9%

Consensus Range, Imports - Y/Y: 17.7% to 20.1%

Consensus Forecast, Exports - Y/Y: 21.7%

Consensus Range, Exports - Y/Y: 17.9% to 24.0%

Based on provisional trade data for the first 20 days of September by the Ministry of

Finance, export values are projected to rise 21.7 percent on the year, marking the 13th

consecutive monthly increase, after rising 19.3 percent a month earlier. In August, the

increase was led by automobiles, semiconductor-related electronic components and

semiconductor production equipment.

Imports are expected to rise 19.9 percent on the year in September after jumping 28.0 percent a

month earlier. In August, the increase was driven by crude oil, semiconductor-related electronic components and computers, including peripherals, as largely seen in recent

months.

UK CPI for September (Wed 0700 BST; Wed 0600 GMT; Wed 0200 EDT)

Consensus Forecast, M/M: 0.3%

Consensus Range, M/M: 0.2% to 0.4%

Consensus Forecast, Y/Y: 3.4%

Consensus Range, Y/Y: 3.3% to 3.5%

Consensus Forecast, Core CPI - Y/Y: 2.7%

Consensus Range, Core CPI - Y/Y: 2.6% to 2.8%

CPI seen up 3.4 percent on year in September with core up 2.7 percent.

Thursday

New Zealand CPI for March (Third Quarter) (Thu 1045 NZDT; Wed 2245 GMT; Wed 1745 EDT)

Consensus Forecast, Q/Q: 0.8%

Consensus Range, Q/Q: 0.7% to 0.9%

Consensus Forecast, Y/Y: 3.8%

Consensus Range, Y/Y: 3.7% to 3.9%

Annual inflation expected to recede to 3.8 percent in Q3 from 4.1 percent in Q2 as fuel costs are seen lower, offset by higher property taxes, food and building costs.

South Korea Bank of Korea Announcement (Thu 1000 KST; Thu 0100 GMT; Wed 2100 EDT)

Consensus Forecast, Change: 0 bp

Consensus Range, Change: 0 bp to 0 bp

Consensus Forecast, Level: 3.00%

Consensus Range, Level: 3.00% to 3.00%

After rate increases in July and August, the bank is expected to leave rates unchanged. It helps that CPI has steadied while the higher Korean won helps hold down import costs.

France Business Climate Indicator for October (Thu 0845 CEST; Thu 0645 GMT; Thu 0245 EDT)

Consensus Forecast, Index: 95.8

Consensus Range, Index: 95.0 to 96.0

Sentiment expected basically flat at a soft 95.8 in October after dropping to 96.0 in September.

US Jobless Claims for Week of October 17 (Thu 0830 EDT; Thu 1230 GMT)

Consensus Forecast, Initial Claims - Level: 200 K

Consensus Range, Initial Claims - Level: 197 K to 202 K

Claims expected to continue hovering at historic lows in the low hire, low fire economy.

Eurozone EC Consumer Flash for October (Thu 1600 CEST; Thu 1400 GMT; Thu 1000 EDT)

Consensus Forecast, Index: -17.0

Consensus Range, Index: -17.3 to -17.0

US Leading Indicators for September (Thu 1000 EDT; Thu 1400 GMT)

Consensus Forecast, M/M: -0.2%

Consensus Range, M/M: -0.2% to -0.1%

The consensus sees a soft reading at minus 0.2 percent in September.

US Kansas City Fed Manufacturing Index for October (Thu 1100 EDT; Thu 1500 GMT)

Consensus Forecast, Level: 11.0

Consensus Range, Level: 7.0 to 12.0

The consensus sees the index slightly lower but in moderate expansion at 11.0 in October from 14.0 in September.

Friday

Japan CPI for September (Fri 0830 JST; Thu 2330 GMT; Thu 1930 EDT)

Consensus Forecast, CPI - Y/Y: 2.1%

Consensus Range, CPI - Y/Y: 2.1% to 2.3%

Consensus Forecast, Ex-Fresh Food - Y/Y: 2.1%

Consensus Range, Ex-Fresh Food - Y/Y: 2.0% to 2.3%

Consensus Forecast, Ex-Fresh Food & Energy - Y/Y: 2.3%

Consensus Range, Ex-Fresh Food & Energy - Y/Y: 2.2% to 2.5%

Singapore CPI for September (Fri 1300 SGT; Fri 0500 GMT; Fri 0100 EDT)

Consensus Forecast, Y/Y: 2.4%

Consensus Range, Y/Y: 2.2% to 2.5%

CPI expected slightly higher at 2.4 percent in September after 2.3 percent in August.

UK Retail Sales for September (Fri 0700 BST; Fri 0600 GMT; Fri 0200 EDT)

Consensus Forecast, M/M: -0.1%

Consensus Range, M/M: -0.5% to 0.1%

Consensus Forecast, Y/Y: 1.5%

Consensus Range, Y/Y: 0.7% to 2.0%

Sales expected to retreat by 0.1 percent on the month in September after rising 0.5 percent in August.

France PMI Composite Flash for October (Fri 0815 CEST; Fri 0615 GMT; Fri 0215 EDT)

Consensus Forecast, Manufacturing Index: 50.5

Consensus Range, Manufacturing Index: 50.0 to 50.5

Consensus Forecast, Services Index: 50.9

Consensus Range, Services Index: 50.2 to 50.9

The consensus sees manufacturing at 50.5 in the October flash versus 50.6 in the September final. Services seen down slightly at 50.9 from 51.2.

Germany PMI Composite Flash for October (Fri 0930 CEST; Fri 0730 GMT; Fri 0330 EDT)

Consensus Forecast, Composite Index: 53.1

Consensus Range, Composite Index: 52.8 to 53.6

Consensus Forecast, Manufacturing Index: 53.4

Consensus Range, Manufacturing Index: 53.0 to 54.0

Consensus Forecast, Services Index: 52.5

Consensus Range, Services Index: 52.2 to 53.0

The composite expected softer at 53.1 in the October flash from 53.8 in the September final. Manufacturing seen down at 53.4 from 53.9 and services at 52.5 from 52.9.

Eurozone PMI Composite Flash for October (Fri 1000 CEST; Fri 0800 GMT; Fri 0400 EDT)

Consensus Forecast, Composite Index: 52.6

Consensus Range, Composite Index: 52.3 to 52.8

Consensus Forecast, Manufacturing Index: 52.6

Consensus Range, Manufacturing Index: 52.2 to 53.0

Consensus Forecast, Services Index: 52.5

Consensus Range, Services Index: 52.2 to 53.0

The composite expected softer at 52.6 in the October flash from 53.1 in the September final. Manufacturing seen down at 52.6 from 52.9 and services at 52.5 from 53.0.

UK PMI Composite Flash for October (Fri 0930 BST; Fri 0830 GMT; Fri 0430 EDT)

Consensus Forecast, Composite Index: 51.8

Consensus Range, Composite Index: 51.4 to 52.0

Consensus Forecast, Manufacturing Index: 51.7

Consensus Range, Manufacturing Index: 51.5 to 52.0

Consensus Forecast, Services Index: 51.8

Consensus Range, Services Index: 51.5 to 52.0

The composite expected marginally softer at 51.8 in the October flash from 52.0 in the September final. Manufacturing seen at 51.7 from 51.9 and services at 51.8 from 52.1.

Canada Retail Sales for August (Fri 0830 EDT; Fri 1230 GMT)

Consensus Forecast, M/M: 1.3%

Consensus Range, M/M: 1.1% to 1.3%

Forecasters agree with Statistics Canadas projected 1.3 percent increase in retail sales for August from July.

US PMI Composite Flash for October (Fri 0945 EDT; Fri 1345 GMT)

Consensus Forecast, Composite Index: 57.6

Consensus Range, Composite Index: 57.0 to 58.0

Consensus Forecast, Manufacturing Index: 55.5

Consensus Range, Manufacturing Index: 55.0 to 55.6

Consensus Forecast, Services Index: 58.0

Consensus Range, Services Index: 56.5 to 58.4

The composite expected softer but still robust at 57.6 in the October flash from 58.4 in the September final. Manufacturing seen down at 55.5 from 55.9 and services still booming at 58.0 from 58.8.

US Consumer Sentiment for October Final (Fri 1000 EDT; Fri 1400 GMT)

Consensus Forecast, Index: 46.3

Consensus Range, Index: 46.0 to 47.3

No revision expected from the very bad 46.3 in the October preliminary, down 3.7 percent from September final and down 13.6 percent from a year ago.