A 0.3% increase is anticipated for a second month in the consumer price index that excludes food and fuel, which economists believe to be a stronger reflection of underlying pricing pressures. The core CPI is expected to decline on an annual basis, but this is only due to base effects as the index surged significantly in September of last year, the most since 1982.
The world’s largest economy’s resilient demand, supported by unceasing job creation, has made it difficult for the Federal Reserve to get inflation down to its target level.
Price pressures are still present despite weakening, which is why Fed officials have been emphatic about the necessity for their benchmark rate to stay high for a considerable amount of time. The credit markets, where Treasury yields have recently increased, have responded favourably to this message.
The 5% Bond Market Means Pain Is Coming for Everyone.
The Fed’s September meeting minutes, which are coming on Wednesday, could provide insight into how strongly central bankers are leaning towards hiking interest rates once more before the year is up. On November 1st, the next policy choice is made.
Several US central bankers, including Vice Chair Philip Jefferson, will speak in the upcoming week. In addition to Susan Collins, Governor Christopher Waller, Raphael Bostic, Lorie Logan, and Neel Kashkari also speak.
The government’s producer price index is anticipated to reflect more mild wholesale inflation on Wednesday.
According to Bloomberg Economics
“The heated debate over whether the Fed is done raising rates has not been resolved by the lopsided September jobs report. The University of Michigan Consumer Sentiment Survey and the CPI, two important future economic measures, may provide a more conclusive picture.
While increasing petrol prices may have increased short-term inflation predictions in the preliminary UMichigan survey for October, we anticipate September core CPI inflation to come in somewhat higher than consistent with the Fed’s 2% mandate.
This week doesn’t have any significant interest rate decisions planned because the International Monetary Fund and the World Bank are convening there for their annual meetings.
The IMF’s World Economic Outlook, which includes a fresh set of projections, will be presented on Tuesday in addition to other events and speeches involving top financial authorities.
For information on what occurred last week, click here. Our summary of upcoming events in the global economy is provided below.
Pan Gongsheng, the new head of China’s central bank, will make his first significant overseas appearance in Marrakech. Investors and decision-makers will be interested in hearing his opinions on the economy, real estate market, and anticipated course of monetary policy in China.
Following recent talk of an intervention, a number of other important financial authorities will also be there, including the governor of the Bank of Japan Kazuo Ueda and the Japanese finance minister Shunichi Suzuki.
Trade statistics from Taiwan, the Philippines, and China will provide updates on the most recent level of global demand throughout the week.
After the RBA held rates at its first meeting under new Governor Michele Bullock, Assistant Governor Chris Kent will address.
At the end of the week, Malaysia will present its proposed budget, and China will also present its most recent inflation data.
Read Bloomberg Economics’ whole Week Ahead for Asia for more information.
Asia, Europe, and Africa
While regional central bank leaders, like Christine Lagarde of the European Central Bank and Andrew Bailey of the Bank of England, congregate in Marrakech, there aren’t many speaking engagements scheduled outside of the IMF meetings.
Important data for the euro region will still be released. On Monday, industrial production in Germany will be released, and on Tuesday, industrial production in Italy will do the same, revealing how those two big countries are doing with regard to factory output amid ongoing weakness brought on by sluggish global demand.
Then, on Thursday, the overall statistics for the euro zone will be released.
Investors will closely examine the minutes of the ECB’s September meeting for any indications of the range of views held by the Governing Council and cues for potential future action. Two days ahead of schedule, the ECB publishes its research on consumer inflation expectations.
On Thursday, the UK releases its monthly gross domestic product figures for August. Economists expect it to show a modest uptick that falls short of making up for July’s 0.5% decline.
In other parts of Europe, the Nordic countries will be keenly monitoring inflation figures at a time when investors are unsure how much tightening is necessary in some of those economies. In Norway, Denmark, and Sweden, numbers are due.
Tuesday will see the release of consumer price data in Hungary. Even after falling for a seventh month, inflation in the European Union is still the highest at over 16%.
Investors in the south will keep an eye on data released that day to see if Egypt’s inflation increased to record levels. It is being slowed by the central bank in an effort to relieve pressure on the pound.
According to a Bloomberg survey of analysts, the current-account deficit in Turkey is predicted to drop sharply in August, to $500 million. The lira may not be under as much pressure if the figures from Wednesday support that.
Inflation in Ghana is expected to have decreased for a second consecutive month in September, according to data being out on Wednesday. This will allow the central bank to hold rates in November.
Read Bloomberg Economics’ whole Week Ahead for EMEA for more information.
South America
Both the monthly and mid-month inflation statistics in Mexico are supporting Banxico’s hawkish position, according to the early consensus. While the reading for the entire month of September probably slowed for an eighth month, the print for the second half of the month only slightly decreased.
The post-decision statement should be hammered home in the minutes of Banxico’s Sept. 28 decision, which unanimously opted to keep rates at 11.25% for a fourth meeting, reiterating that the inflation forecast is still “complicated and uncertain.”
Three months after slipping below the 3.25% mid-point in June, economists anticipate that Brazil’s September inflation print will have exceeded the top of the central bank’s target range of 1.75% to 4.75% on Wednesday.
The highlights in Chile include the trade balance for September, copper exports, and the results of the central bank’s survey of economists, while Colombia releases statistics on consumer confidence, retail sales, manufacturing, and industrial production.
Argentina publishes data on national consumer prices for September as the last significant economic announcement prior to its presidential election on October 22.
Although the monthly reading might drop below the three-decade high of 12.4%, the year-over-year print might surpass 135%. The central bank consulted with private economists who predict it will reach 169.3% in 2023.