In-depth Analysis

Focus on midterm elections in the United States | Weekly Outlook

  • On Monday 7th: China releases Export and Import data along with its Trade Balance
  • On Tuesday 8th: RBA Chief, Philip Lowe to speak and US MidTerm Elections are being held
  • On Wednesday 9th: Chinese CPI data and its Producer Price Index (PPI) are released, plus weekly US Crude Oil Inventories
  • On Thursday 10th: US CPI and Initial Jobless Claims are due
  • On Friday 11th: UK releases GDP, Manufacturing and Industrial Production data, Germany publishes CPI, and the US release Michigan consumer sentiment and expectations

Weekly outlook

A quiet week ahead for economic updates. While most major companies have also reported their Q3 earnings, there are a few notable releases left to follow this week. After a disappointing quarter for pharmaceutical giant, Pfizer, Astrazeneca Q3 results are to follow this week, as well as Walt Disney which is expected to show decent revenue increases despite disappointing share price activity lately.

The US will be focused on their mid-term elections during the week as the Biden administration struggles to hold onto key seats while low approval ratings and the cost of living continue as major issues. Widely anticipated CPI and Jobless Claims data will also be released during the week in the US, which will indicate whether the tighter monetary conditions introduced by the Federal Reserve are starting to hit their mark.

Monday 7th of November

Chinese Export/Import data and its Trade Balance are due to be published today for a look at how the industrial giant is performing while widespread lockdowns are still affecting various sectors of the economy. Annual Exports and Imports are expected to be down for October 4.1% from 5.7%, and 0.1% from 0.3% respectively, while the trade balance in USD is forecast for growth from 84.74B to 95.80B for October.

Tuesday 8th of November

Australia’s Reserve Bank Governor, Philip Lowe, is due to speak at a panel discussion in Zurich, called “Inflation Uncertainty and its Effects on Policy Decisions.” Governor Lowe’s speeches always carry a high level of impact relative to Australian markets.

US MidTerm Elections are held today, in which all 435 seats in the House of Representatives and over a third of the Senate seats will be contested. 

Major Earnings Report due:

  • Walt Disney

Wednesday 9th of November

Chinese CPI data and their Producer Price Index (PPI) are all released today. 

Monthly inflation expectations are due for a slight increase from 0.3% to 0.4% for October compared to September, but annual inflation is forecast to have dropped from 2.8% to 2.5% for October. Annual PPI data, which shows the difference for input prices for goods and services, is set to have dropped to -1.4% from 0.9% for October.

Weekly US Crude Oil Inventories are due to be published. Last week’s report showed that a strong increase in the price of diesel was a reflection of low inventories going into winter.

Major Earnings Reports due:

  • Honda Motor Co Ltd

Thursday 10th November

The US will publish CPI data and its Initial Jobless claims for the month. As the Federal Reserve has been on a tare of front-loading interest rate hikes in recent months, the board will be hoping for a decent reduction in the annual inflation figures. 

Core CPI, which strips out food and energy, is expected to have dropped from 0.6% to 0.5% for the month of October compared to September, and is also forecast to have dropped from 6.6% to 6.5% for October year-on-year.

Full annual CPI is expected to drop slightly from 8.2% to 8.1%, while for October compared to September that figure is forecast to increase from 0.4% to 0.7%.

Initial Jobless claims are due today. Last week’s numbers were a surprise to many as they held steady at 217K despite the cooling economy and increasing interest rates.

Major Earnings Reports due:

  • AstraZeneca PLC 

Friday 11th of November

The UK publishes its Q3 GDP data and Industrial and Manufacturing Production. 

The economy is expecting to show a slowdown with GDP looking at a drop from 0.2% to -0.2% from the previous quarter, and 2.8% from 4.4% annually for Q3. 

Industrial Production, which measures the change in total industrial output value, is expected to have increased from -1.8% to -0.2%, while Manufacturing Production, which gauges manufacturing output adjusted for inflation, has been trending down in recent months.

Germany is due to release CPI data today, and it is widely hoped that the rapid pace of climbing inflation is starting to respond to increasing interest rates as the economy cools. Annual inflation is expected to remain at 10.4%, while the figure for October is forecast to have increased compared to September from 0.9% to 1.9%.

It is anticipated that the Michigan Consumer Sentiment will have slightly improved in November, moving up from 59.9 to 60, as measured by the University of Michigan Consumer Sentiment Index. This index provides a rating of the level of present and future economic conditions of about 500 consumers.

 

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