With the trade war between President Donald Trump and China still echoing (The President will be very bellicose after getting his nominee up for the US Supreme Court at the weekend, so he could start attacking China again this week), the latest economic data from the world’s second-biggest economy will start flowing this week and first up it will be the trade data for the month and the quarter.
That will be examined closely to see if there are any signs of an impact from US tariffs. China though has started hitting back at the US with American trade figures on Friday showing no oil exports from the US to China since July.
Economists think that the figures will show import growth of around 18% and exports running at around 10% – with the data for trade with the US the stand out for analysts.
As well credit and lending data from banks and other groups will also be issued on Friday and will be watched for evidence of the recent credit easing.
In Australia, we will get an update on business and consumer confidence, job ads and housing finance.
Later this morning the ANZ releases its monthly job ads survey for September – another small rise is forecast.
The AMP’s Chief Economist, Dr. Shane Oliver says we can expect the September monthly NAB survey (tomorrow) to show continuing solid business conditions but more subdued confidence.
Wednesday sees the monthly consumer confidence report from Westpac and the Melbourne Institute to show a slight improvement after its August fall.
Friday sees the release of housing finance August which will show continuing softness in loans to property investors.
Friday also sees the release of the Reserve Bank’s second Financial Stability Review for the year – watch for any commentary on the banking and finance royal commission, the slid in house prices and fears that tightening lending standards risks turning into a credit crunch partly in response to the inquiry and its disclosures of rotten activities by banks and others.
In the US the focus will be on inflation with producer price data for September out on Wednesday and consumer price inflation data out on Thursday.
Dr. Oliver says CPI is expected to show a fall in headline inflation to 2.5% year on year but core CPI inflation is expected to remain around 2.2%yoy which is consistent with inflation as measured by the private consumption deflator remaining around 2%yoy which is the Fed’s target.
US September quarter earnings results will also start to flow with corporate tax cuts and strong economic conditions expected to see profits up by over 20% from a year ago.
US investors will also look for remarks by New York Fed president John Williams and Atlanta Fed president Raphael Bostic — both voting members of the monetary policy setting Federal Open Market Committee — through the week.
The results of the first round of Brazil’s important national elections will be known today and tomorrow.
The rightwing former army captain Jair Bolsonaro is leading polls in the two-round election. His main rival is Fernando Haddad from the leftist Workers’ party or PT.
On Wednesday, European leaders gather to discuss the UK and its exit from the group, or Brexit.
The EU’s chief Brexit negotiator Michel Barnier will present the draft political declaration in Brussels outlining the bloc’s new partnership with the UK.
If there is no Brexit deal, then the EU will block British airliners, exports, nor will it upgrade or expand its customers or immigration facilities and staffing levels, nor will it make special provision for financial transactions originating in the UK.
Visa-free travel will continue between the EU and UK, but only if it is reciprocal.
There is a further summit between the EU and Britain planned for October 17 and if there is no agreement, the post-Brexit rules and processes will be firmed up by December.
UK airlines such as Ryanair, IAG (which owns BA and Iberia) could find themselves banned from flying because they do not meet the requirements for an EU operating license to be 50% owned by an EU-based group.
