Financial Market Outlook for October 17-21

The markets are slowly moving towards accepting the possibility of the Fed raising rates coming December. But this week the focus will be on the upcoming ECB rate decision, which will be the main event of the week. Other events and reports to consider include: U.S. CPI, China’s GDP for Q3, BOC’s rate decision, China’s industrial production, U.S. housing starts, ECB President Draghi speaks, U.S. existing home sales, and GB public sector net borrowing. So let’s review the main events for the week of October 17th to 21st.

(All times GMT):

Monday, October 17th

10:00 – EU CPI (final): This will be the final estimate of the CPI for Europe; last time the estimate was for an annual gain of 0.4%, which remains well below the ECB’s annual goal;

14:15 – U.S. Industrial Production: This report will show the changes in the U.S industrial production during September; as of August, industrial production decreased by 0.4%; this time the estimate is for a gain of 0.3%;

18:35 – ECB President Draghi Speaks: Mario Draghi will deliver welcoming remarks at the European Cultural Day, in Frankfurt;

Tuesday, October 18th

09:30 – GB CPI: Based on the recent report, the CPI remained at an annual rate of 0.6% in August; in the next report, the CPI is expected to rise to 0.9%;

13:30 – Canada Manufacturing Sales: In the last report regarding August 2016, manufacturing sales edged up by 0.1%; this time, it’s expected to rise by 0.3%;

13:30 – U.S Core Consumer Price Index: This monthly report pertains to the changes in the core consumer price index for September 2016. According to the U.S Bureau of Labor statistics, back in August, the CPI edged up by 0.2%; the core CPI  rose by 0.3%; this time, the CPI and core CPI are expected to rise by 0.3% and 0.2%, respectively;

03:00 –China Third Quarter GDP 2016: Back in Q2, China’s economy grew by 6.7% in annual terms – close to expectations (no surprise there) as the economic data published in China isn’t too reliable. Current expectations point to a growth rate of an annual rate of 6.7% for Q3 – which is in line with China’s growth rate goals of 6.5-7%;

05:30 – China’s Industrial Production: According to the recent monthly report, China industrial production edged up to annual rate of 6.3% — higher than expected; if the report shows another gain – currently the market expects a gain to 6.4% — this could suggest the Chinese market is doing well;

Wednesday, October 19th

09:30 – Great Britain Average Earnings Index 3m/y: This report presents the developments in the price businesses and the government pays for labor force; in the recent report, this index slipped to 2.3%; in the next report, the index is expected to remain at 2.3%;

09:30 – Great Britain Claimant Count Change: As of the previous monthly update, the number of unemployed in GB rose by 2.4K; the rate of unemployment remained flat at 4.9% and is expected to maintain this level this time as well;

13:30 – U.S. Building Permits: The U.S Census Bureau will publish for September 2016 the U.S. building permits monthly report; in the last update, total permits slipped to 1,140 thousand houses (the recent U.S building permits update); current estimates are for a modest gain to 1,170 thousand houses;

13:30 – U.S. Housing Starts: In the last report, U.S. housing starts decreased to 1,140 thousand houses; in the next report, this figure is expected to edge up to 1,180 thousand houses;

15:00 – Bank of Canada’s Overnight Rate: Bank of Canada maintained its overnight rate at 0.50%. And the market still expects no change to policy this time; the BOC will also hold a press conference and release its quarterly monetary policy report;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will release its weekly report on the U.S oil and petroleum stockpiles for the week ending on October 14th;

02:30 – Australia Employment Update: In the last August report the rate of unemployment ticked down again to 5.6%; the number of employed (seasonally adjusted) slipped by 3.9K people (see here the recent report);

Thursday, October 20th

09:30 – GB Retail Sales: In the upcoming report the market expects sales to have risen by 0.3% compared to the previous month;

12:45 – ECB Rate Decision: This will be one the main event of for week, even though the ECB isn’t expected to introduce any new policy measures. But this meeting will also include a press conference; if Draghi were to hint of possible extending QE or more stimulus, this could drive further down the Euro;

13:30 – Philly Fed Manufacturing Index: This monthly survey estimates the growth of the US manufacturing sectors. In the recent survey, the growth rate rose from 2 in August to 12.8 in September; in the next report, the index is expected to slightly fall to 5.2 (the recent Philly Fed review);

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will refer to the developments in the initial jobless claims for the week ending on October 14th; in the previous report, jobless claims slipped to 246K; in the next report, estimates are for 251K claims;

15:00 – U.S. Existing Home Sales: This report will refer to the U.S. existing home sales for September 2016; in August, the number of homes sold fell to a seasonally adjusted annual rate of 5.33 million houses; the current expectations are for the annual rate to slightly increase to 5.36 million houses;

16:00 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and rates as of October 14th;

Friday, October 21st

09:30 – GB Public Sector Net Borrowing: In the upcoming report the market expects net borrowing to pick up to 8.6 billion pounds;

13:30 – Canada’s core CPI: According to the latest report, the core CPI didn’t move, M-o-M;

13:30 – Canada Core Retail Sales: In the previous report regarding August, sales decreased by 0.1%;

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