For a second week a combination of a US Presidential TV debate, data from China, US earnings and central bank discussions will dominate global markets. Locally it will be the September jobs report as well as the RBA minutes that will hold investor attention.
All in all it will be a big week as we head towards the next Fed meeting in early November, and then the US elections on the 8th.
With Hiliary Clinton leading in the polls, the third debate Thursday midday, our time, is shaping up as a serious test of Donald Trump – some US analysts are wondering if he will turn up, or if he does, they are asking, will he go feral?
The chances of him self-destructing will keep audience numbers high – the debate will be carried on all US networks (The second was not on NBC because of the Sunday night NFL game).
For us in Australia the Chinese data this week will be of prime importance after last week’s weak trade report for September, and then inflation report on Friday which showed a rise in consumer inflation to an annual rate of 1.9% and the first rise in producer price inflation for more than four years (up 0.1%).
Today sees the release of bank lending figures, Wednesday will see the release of the GDP estimate for the third quarter, plus investment, retail sales and production data. Friday sees the release house price data for the country’s 70 biggest cities.
Analysts expect China to report that economic growth remained unchanged at 6.7% for a third straight quarter. Retail sales, industrial production and fixed asset investment are also expected to be little changed, but the house price data will be watched to see if the boom is getting out of hand.
Besides the third debate, the US sees September industrial production (tonight, our time), consumer inflation (tomorrow night, our time), housing starts (Wednesday night, our time) and existing home sales (Thursday night, our time).
As well, manufacturing conditions surveys for the New York and Philadelphia regions will also be released along with the Fed’s Beige Book of anecdotal evidence on the economy ahead of the next full meeting at the start of November.
The US third quarter earnings season continues with more than 80 major companies reporting. A number of major groups in Europe and Asia will also release their latest figures (mostly six months).
In Europe the focus will be on the European Central Bank meeting (Thursday evening, our time) with no change in policy likely.
The AMP’s chief economist, Dr Shane Oliver says “A decision on extending its quantitative easing program beyond its March 2017 expiry is unlikely until the December meeting. Inflation is below target but with growth okay and the current program still having a while to run there is no reason for the ECB to decide now.”
In Australia the minutes from the last RBA Board meeting and a speech by Governor Lowe (both tomorrow) will be watched for any clues regarding the outlook for interest rates but are likely to reinforce the impression that the RBA is comfortably on hold for now.
The Australian jobs report for September is the main local release this week – Dr Oliver says we can expect a 20,000 gain in employment for September but the unemployment rate to rise back to 5.7% from 5.6%.
Locally, Ten Network’s 2015-16 August year results out on Thursday. API’s full year earnings will also be issued the same day aswell. The company has already upgrade its guidance and now expects underlying net profit for the 12 months to August 31 of $51 million – up 17% on 2014-15, and above market forecasts.
And there are a number of annual meetings this week here and offshore. Thursday night sees the shareholders of BHP Billiton Plc meet in London where the future of the stricken Samarco iron ore mine and pellet plant operation in Brazil will be high on the agenda, with talk of it possibly not restarting.
BHP releases its first quarter operations review, while rivals, Rio Tinto releases its third quarter figures on Thursday, as will the third biggest iron ore exporter, Fortescue Metals Group.
Other companies to release quarterly reports this week include Evolution Mining, Oil Search, Woodside and Santos.
Other AGMs will be by companies including origin Energy, Cochlear, Fletcher Building, Ansell, Bellamy’s, Healthscope and Crown where the detention of up 18 of the company’s executives and employees in China at the weekend and late last week, will be top of the agenda for discussion.
And the third quarter update from CIMIC (the hold Leighton Holdings) will also be out on Thursday. CIMIC is bidding for engineering group, UGL. It took over another engineer, Sedgman earlier in the year.
And besides the ECB meeting on Thursday night, our time, another meeting in Europe holds considerable interest – the EU Leaders Council will be held and it will be the first attended by Theresa May since she became Britain’s PM. Brexit will of course feature. Watch for some studied fireworks,especially from Germany, France and Spain.
