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Flash October PMIs & Japan's lower house election take centre stage

21 October 2024

Emily Nicol
  • The flash October PMIs from the major economies (Thursday) will provide an update on economic conditions at the start of Q4; while the surveys from the US, Japan and UK will likely point to ongoing expansion, the euro area composite PMI is expected to imply ongoing stagnation amid persisting contraction in Germany
  • In Japan, the main focus will be the Lower House election on Sunday with polls suggesting that the outcome could be the closest since 2009 when the LDP lost power to the DPJ. Indeed, with polls implying a loss of seats for both the LDP and its junior partner Komeito, the ruling coalition might even fail to garner a simple majority
  • Tokyo CPI figures (Friday) are expected to show that headline inflation fell 0.3ppt to a six-month low of 1.8%Y/Y due to lower energy prices. The BoJ’s preferred core measure, excluding fresh food and energy, is expected to move sideways at 1.6%Y/Y for a third consecutive month

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US payrolls, euro area inflation estimates & BoJ Tankan in focus

30 September 2024

Chris Scicluna; Emily Nicol
  • Flash estimates of euro area HICP rate look bound to fall below the ECB’s 2% target for the first time since mid-2021 
  • In the US, the September non-farm payrolls report, ISM surveys and August JOLTs data are due, while Fed Chair Powell is due to give a speech on the economic outlook later today
  • In Japan, despite a disappointing IP release in August, the BoJ’s Tankan survey is likely to suggest that conditions in the factory and services sector were little changed from Q2 to signal ongoing expansion

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Flash PMIs, inflation and LDP leadership election the highlights this week

23 September 2024

Chris Scicluna; Emily Nicol
  • The flash September PMIs from the major economies will provide an update on economic conditions at the end of Q3 - while the surveys from the US and Japan will likely point to ongoing expansion at the end of Q3, the euro area composite PMI reported a notable deterioration and signalled renewed contraction
  • The US PCE deflator, flash estimates of French and Spanish inflation and Tokyo CPI figures are due Friday
  • In Japan, the main focus will be the LDP leadership election result on Friday. With nine candidates nominated, the outcome is difficult to predict, but polls put former Environment Minister Shinjiro Koizumi as the marginal favourite among LDP lawmakers and supporters to become Japan’s next Prime Minister 

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Fed set to cut rates for first time this cycle, but BoE & BoJ to stand pat

16 September 2024

Chris Scicluna; Emily Nicol
  • In a busy week for monetary policy decisions, the Fed seems bound to deliver the first rate cut this cycle, although the magnitude – 25bps or 50bps – is too close to call with certainty 
  • The BoE is likely to leave Bank Rate on hold, but the policy statement could well signal that a further cut will come at the following meeting in November and we do not rule out a cut this week if UK inflation data surprise significantly to the downside
  • The BoJ’s policy announcement is widely expected to leave the main interest rate unchanged at 0.25%, but Ueda might well leave the door open to a further cut this year

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ECB to deliver a further 25bps cut, while US CPI report in focus

09 September 2024

Chris Scicluna; Emily Nicol
  • The ECB’s policy announcement seems bound to deliver a further cut of 25bps in the Deposit Rate to 3.5%, while President Lagarde might also offer a more dovish take in her press conference in line with a more subdued outlook for economic activity
  • In the US, all eyes will be on the August CPI report, which will likely see the annual rate of headline inflation ease to 2.6%Y/Y the lowest since March, with core inflation unchanged at 3.2%Y/Y, the joint-lowest since spring 2021
  • A busy week for UK data will bring an update on labour market conditions and monthly GDP figures 

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