In-depth Analysis

Focus on UK’s fiscal statement and CPI figures | Weekly Outlook

On Monday 14th: Industrial Production for the EU is released, and BoE answers questions at Parliament. 

On Tuesday 15th: Japan’s GDP data is released, China publishes Industrial Production figures, the UK’s employment figures are due, along with the German ZEW index and NY Empire State Manufacturing Index.

On Wednesday 16th: CPI for the UK is released, and the US publishes Retail Sales data as well as Crude Oil Inventories.

On Thursday 17th: Employment data from Australia is published, the EU releases its CPI reports, and the US Philadelphia Federal Reserve Manufacturing Index is due. The UK will also publish its highly anticipated spending plan that day. 

On Friday 18th: The UK releases Retail sales info, and the US publishes its Existing Home Sales data.

Weekly outlook

Bricks and mortar retail giants, Walmart, Home Depot, and Target are all due to report their Q3 earnings this month, as well as the online behemoth Alibaba. Forecasts are for some disappointing results all around for Q3. It will also be intriguing to see how these major retailers are planning on dealing with the increasing interest rates, volatile commodity prices, a strong US currency, higher labor costs, and weakening customer demand for the final quarter of 2022. 

Inflation figures for the EU and Great Britain will be widely anticipated during the week. As the two regions will be looking at the impact of rising interest rates on demand while trying to walk the tightrope of avoiding especially deep recessionary conditions. This week, a softer-than-expected American CPI was published, which propelled markets that are now hoping that the Fed might be less aggressive going forward.

Monday 14th of November

The EU is due to release its monthly Industrial Production figures for September today. Expectations are that there will be a drop in this number from 1.5% down to 0.4% as factories struggle with higher energy expenses. 

The BoE Governor and member of the MPC are due to testify on the economic outlook and inflation in front of the Parliament’s Treasury Committee today. Investors will be watching for a hint of the future of policy changes and comments relative to currency markets.

Major Earnings Reports due:

  • Tyson Foods Inc

Tuesday 15th of November

Japan publishes its quarterly GDP data with expectations for a slowdown from 0.9% to 0.3% for the last quarter compared to the previous. Year-on-year Q3 numbers are also forecast to be down from 3.5% to 1.1%.

China will put out its Industrial Production figures for October compared to last year. With zero-Covid policy still having an impact, the expectation is for a drop from 6.3% to 5.2%.

The Brits will release their employment data today, including Average Earnings, Claimant Count Change, and the Unemployment Rate. Including Bonus payments, the Average Earnings are expected to be down from 6% to 5.9%. The previous 25.5K recorded for September was well above forecasts, this figure could be set to increase as the economy heads into even tougher times and more people apply for unemployment support. The Unemployment Rate is due to increase from 3.5% to 3.6%.

The German ZEW Economic Sentiment report provides insight into the near future of the economy and business conditions from a survey of around 350 institutional investors and analysts. A slight expected increase from -59.2 to -55 is expected and still indicates extreme pessimism.

From the US, the NY Empire State Manufacturing Index is due, which measures business sentiment for the state of New York from around 200 manufacturers. Expectations are for an improvement from -9.10 to -5. Also from the US, the Producer Price Index, which is a measure of the cost of raw materials and parts, for example, is looking to remain stable at 0.4%.

Major Earnings Reports due:

  • Walmart Inc
  • Home Depot Inc
  • Vodafone Group plc

Wednesday 16th of November

The UK will publish its highly anticipated CPI data today, as it will impact the direction of the BoE with interest rates. It’s hoped a slight drop from 10.1% to 10% will occur for the year-on-year figure for October, while the monthly rate from October is also expected to be dropping from 0.5% to 0.4% compared to last month.

The US will release its retail sales figures on Wednesday, and coming into Christmas, they’re expected to see some gains. Core sales, stripping out vehicles, are forecast to be up from 0.1% to 0.4%, while retails sales are expected to be at 0.8%

Canada’s CPI data is available today. Previously, the annual rate of core inflation was sitting at 6%. Tightening monetary policy of 350 basis points since January is expected to have had a positive effect on this figure during the month.

US Crude Oil is expected to be down from 3.925M to 1.360M for the amount of Crude stored by US firms, which can very often have a direct effect on energy prices.

Major Earnings Reports due:

  • NVIDIA Corporation
  • Cisco Systems Inc
  • Lowe’s Companies Inc
  • TJX Companies Inc
  • Target Corp

Thursday 17th of November

Australia will publish its monthly employment data today, including the Employment Change and Unemployment Rate. Expectations are for an increase of unemployed people from less than a thousand last month to 15K for October. The Unemployment rate is expected to stay steady at 3.5%.

The EU will release its CPI data, which is widely expected to be holding steady as the ECB has been front-loading rate hikes in recent months. Year-on-year, inflation for October is forecast to stay at 10.7%, Yearly core CPI over the same period will hopefully remain at 5% and monthly CPI for October compared to September should hold at 1.2% if forecasts are correct.

Another important event of that day in Europe will be closely monitored by investors: the announcement of the fiscal plan by the British government.

From the US, investors will be watching the Philadelphia Fed Manufacturing Index, which is a key measure of manufacturing business conditions. It is expected to be edging up to -5.0 from -8.7, but at less than 0 it is still in the negative range.

Major Earnings Reports due:

  • Alibaba
  • Applied Material Inc
  • Palo Alto Networks
  • Macy’s Inc
  • Gap Inc
  • Kohl’s Corp

Friday 18th of November

British Retail sales data will show how the country is responding to tighter lending conditions at present. Coming into Christmas, there are some slight increases projected across the data, with monthly Retail Sales expected to increase from -1.4% to -0.5% in October. Core Retail Sales for last month compared to the same period last year are expected to be up from -6.2% to -4.1%.

From the US, Existing Home sales are expected to continue to show a steady decline. In the same month last year, there were 6.34M existing homes sold compared to the expected 4.36M for October this year.

 

 

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