Lots of interest rate action this week ahead of the main event next week, with a dose of inflation data and fiscal policy here in Australia to add to the mix and shake up the five trading sessions.
Next week sees the Reserve Bank here on Tuesday week and the US Federal Reserve on Thursday morning (Sydney time) making the rate decisions that will influence us here and global markets (in the case of the Fed).
But before then there will rate decisions this week from the Bank of Canada – 0.75% is the estimate according to AMP chief economist Shane Oliver. That would take the Canadian official rate to 4%.
The European Central Bank meets on Thursday with another 0.75% increase on the cards. Shane Oliver wrote at the weekend that would take the ECB’s main refinance rate to 2% and “flag more rate hikes ahead given high inflation (10% yoy in September).
“Eurozone business condition PMIs for October (Monday) and economic confidence (Friday) are expected to soften further as the impact of the area’s energy crisis deepens,” he added.
But the Bank of Japan on Friday will sit and do nothing – there could be another bout of intervention to try and support the yen now that it has breached the 150 yen to the US dollar late last week.
Shane Oliver added “there is some chance it may adjust its 10-year bond yield control to help support the Yen.” Japanese business conditions PMIs for October (Monday) and jobs data (Friday) will also be released.
The major release from America this week is the first estimate of September quarter GDP on Thursday. The US is forecast to have grown by an annual 2.3% in the period after the two successive falls in the March and June quarters.
That should see GDP growth for the year turn positive after the annual 1.1% fall across the first two quarters.
Dr Oliver says other data this week – plus the October business activity surveys home prices for September and consumer confidence for this month – are expected Tuesday, home sales data Wednesday and Friday, durable goods orders on Thursday.
Friday sees the release of September core private final consumption deflator inflation and consumption data (the Fed’s favourite inflation measure) is expected to rise to an annual rate of 5.2% from 4.9%.
The September quarter earnings reporting season will continue. Besides Apple and Amazon, reports are expected from Twitter, Meta (Facebook), Alphabet, Boeing, US Steel, Shopify, Chevron, 3M, Caterpillar, Ford, General Motors, Exxon, Peabody Energy, General Dynamics, GE, ADM, Coca Cola, McDonald’s. Visa, Mastercard, Paramount, Comcast, Honeywell, Tech Resources, and Kraft Heinz.
Of interest in Australia will be the third quarter financials from Vale, the big Brazilian iron ore miner (and copper and nickel producer) towards the end of this week.
Besides the budget and the CPI release, there’s also data on producer prices and on international trade indices. The ANZ releases full year results, Macquarie Bank releases interim figures and Resmed is down to release third quarter figures.
The final spate of quarterly reports is due – South32 and OZ Minerals are due to release today, Newcrest and Fortescue Metals on Thursday.
China’s data to be released includes GDP for the September quarter (2.8% qoq rebound after a 2.6% qoq contraction in the June quarter taking annual growth up to 3.3% yoy (from just 0.4% in the June quarter).
September activity data is likely to remain soft though with industrial production up 4.8% yoy and retail sales up 3.0% yoy. Import and export growth are expected to slow further.
