More pressure on markets this week from China, replaying last week’s performance, and from the world’s major monthly data release – the US jobs report, this time for September.
But markets will also keep a close eye on a possible eruption of tensions about the US budget funding.
For us in Australia, there’s the usual start of the month release of major reports from the Bureau of Statistics, with the retail sales on Friday probably the most important.
There’s more end of month data from Japan, and the early reports on eurozone inflation and employment.
In the US, Friday night sees the jobs report for September and economists expect the economy added 200,000 jobs in September, better than the 173,000 generated in August.
If previous reports this year are any guide, that August figure is likely to be revised higher, and if September produces 200,000 plus new jobs as well, then the odds of a rate rise at the end of the month will rise.
And there won’t be any shortage of heavyweight Fed speakers this week to add to noise levels about that possible rate rise.
Fed chair Janet Yellen is scheduled to deliver opening remarks at the St. Louis Fed community banking conference on Wednesday night, our time, six days after her speech which confirmed the intent to lift rates this year.
Other Fed speakers will include vice chair Stanley Fischer, Chicago Fed president Charles Evans, New York Fed president William Dudley and Fed governor Lael Brainard.
The other focus will be on whether Congress passes US budget funding to avoid a Government shutdown when the new financial year starts on Thursday.
Economists hope it won’t happen, especially with the surprise retirement of Republican House Speaker John Boehner.
That will leave the hard right Republicans in the House of Representatives leaderless while they fight over who will replace the speaker.
But that could also see a wilful act of stupidity from a group of Republicans in the House of Representatives in voting to block funding. If that happens, markets will be startled into a sell-off.
Besides Friday night’s jobs report, other data releases for the US this week include the final September manufacturing conditions survey.
Tonight sees the monthly data on personal consumption, spending and prices, as well as existing home sales. Tomorrow night sees the final report on US consumer confidence for September.
US car sales figures for September are also due out late in the week.
In the Eurozone, the outcome of yesterday’s Catalonian election will generate interest within Spain and a rise in market volatility.
Expect economic confidence indicators tomorrow night and the ‘flash’ estimates of September inflation and unemployment data (Wednesday night) will send conflicting signals – weak prices and solid employment.
Thursday also sees the final manufacturing surveys released for the eurozone, the UK and the rest of Europe.
In Asia China’s official manufacturing conditions survey on Thursday and the final Caixin/Markit survey (both for September) will be released.
Economists will watch for any further weakening, especially in the official survey. The Caixin survey fell to 47 on the first report last week, a 78 month low.
China begins a week-long national holiday on Thursday, after the release of the official survey of manufacturing and the final report from the Caixin/Markit survey.
Japanese industrial production (tomorrow) is expected to show a gain and labour market data on Friday is likely to remain solid. And the Bank of Japan’s Tankan survey of business sentiment and investment intentions will be out on Thursday.
And the Reserve Bank of India announces its latest monetary policy decision tomorrow.
In Australia, there’s the private credit data on Wednesday from the Reserve Bank, building approvals (also on Wednesday), the Core Logic-RP Data home price indicators (on Thursday) for last month, the local survey of manufacturing, also on Thursday, and retail sales on Friday.
In the corporate area, a few meetings and the annual results from Kathmandu tomorrow which will be a loss and won’t be pretty,
As well, the struggling grocery and hardware group Metcash is due to hold an investor briefing tomorrow.
AGL Energy and the ASX hold their annual general meetings.
