Week Ahead


Next week the Fed will be deciding on monetary policy, with markets anticipating no changes. Other important releases include: US ISM Non-Manufacturing PMI, preliminary Michigan consumer sentiment, producer prices and JOLTs job openings; UK Q3 GDP growth, trade balance and industrial production; Eurozone retail sales; Germany trade balance and industrial orders; China foreign trade and inflation; Australia consumer and business morale; Japan machinery orders; Indonesia and the Philippines Q3 GDP growth; and interest rate decisions from Australia, New Zealand and Malaysia. Investors will also react to the US midterm elections on Tuesday and President Xi Jinping speech on Monday.

It will be a busy week in the US as investors turn their attention to next week's FOMC meeting at which the Federal Reserve is likely to keep rates unchanged. The Fed has raised rates three times in 2018 and one more rate hike in December is widely expected as labor-market data for October showed wages rising by the most since 2009 amid a strong labor market and a sustained expansion of economic activity. Meanwhile, voters across the US will head to the polls on November 6th for the Congressional midterm elections. Democrats are expected to take the majority in the House while Senate looks likely to remain in Republican control. Investors will wait to see if the results have any implications on fiscal policy and trade conflict. Regarding the economic calendar, the ISM non-manufacturing index and the final Markit services PMI will both be released, with the former expected to point to a slowdown in services and construction output growth after hitting a record-high expansion in September. The preliminary University of Michigan consumer sentiment index and the final reading of wholesale inventories will also be in the spotlight, alongside producer prices, JOLTs job openings and IBD/TIPP Economic Optimism.

Other important releases for America include Canada Ivey PMI and housing data, and Brazil and Mexico inflation rates.

The UK will be publishing preliminary estimates of third-quarter GDP growth and business investment, alongside trade balance, industrial production and construction output for September. Figures from the ONS are expected to show Britain's economic growth accelerated to 0.6 percent in the third quarter from 0.4 percent in the previous period, mainly boosted by solid contributions from industry and construction sectors and a modest rebound in business investment.

Elsewhere in Europe, the European Commission will provide an update for its economic projections amid worries over global trade tensions, tighter financial conditions and policy uncertainty in some EU members, including Brexit negotiations and Italy's spending plans. Investors will also await the release of the Eurozone retail sales; Germany factory orders, industrial production and foreign trade, which combined should add to concerns about the bloc's largest economy; and Italy and Spain flash Markit services PMIs. In addition, Turkey's inflation figures for October are likely to show another jump in consumer prices on the back of the recent currency crisis.

All eyes are on China's trade balance, inflation and Caixin services PMI. Export and import growth will probably slow in October amid ongoing trade tensions with the US and consumer prices are expected to rise 2.5 percent, the same pace as in the previous month. Meanwhile, Chinese President Xi Jinping is set to deliver a speech at the launch of the China International Import Expo (CIIE) on Monday. A total of 2,800 companies from 130 countries and regions are hoping Beijing will announce reform measures that would allow overseas players to access the world's most populated market. Elsewhere, the Reserve Bank of Australia, Reserve Bank of New Zealand and Bank Negara Malaysia will be deciding on monetary policy, with markets anticipating no changes. Other key highlights for the Asia-Pacific region include Australia NAB business confidence and Westpac consumer confidence; Japan machinery orders and current account; and third-quarter GDP growth rates from Indonesia and the Philippines.

Week Ahead


Joana Ferreira | joana.ferreira@tradingeconomics.com
11/2/2018 6:03:16 PM