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ECB highly likely to keep interest rates unchanged

23 October 2023

Chris Scicluna
, 
Emily Nicol
  • The ECB monetary policy meeting seems bound to leave rates unchanged on Thursday.
  • US Q3 GDP growth is bound to be strong (circa 4½%Q/Q ann.)
  • Flash October PMIs are likely to remain consistent with contraction in both the euro area and UK.
  • In Japan, Tokyo CPI will be the most notable data of the week, with the BoJ’s preferred measure of core inflation expected to have eased 0.2ppt to 3.7%Y/Y.

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German IP fell for a fourth consecutive month

09 October 2023

Emily Nicol
  • German IP declined for a fourth consecutive month in August as construction and energy production fell back significantly
  • In the UK, August GDP figures on Thursday are expected to report some positive payback for the weather-associated weakness in July
  • In the US, the key economic release will be September CPI results on Thursday
  • Sentiment surveys will dominate the Japanese dataflow this week

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Ongoing resilience in euro area jobs market

02 October 2023

Emily Nicol
, 
Chris Scicluna
  • The BoJ’s Tankan headline sentiment indices beat expectations, with auto makers in Q3 the most upbeat since the start of 2019
  • In the UK, the BoE’s Decision Maker Panel survey will provide an update on firms’ price and wage expectations at the end of Q3
  • In the US, Friday’s labour market report will be this week’s highlight

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Euro area HICP to report a notable step down

25 September 2023

Emily Nicol
  • In the euro area, the flash September inflation estimates will report a notable step down as base effects from last year’s German discounted travel pass falls out of the annual calculation
  • In the UK, BoE bank lending figures will flag ongoing weakness in mortgage lending amid higher borrowing costs and declining house prices
  • In the US, August figures for personal spending are set to be boosted by strong income growth, albeit with growth being flattered by higher prices
  • In Japan, this week will bring the BoJ’s estimates of underlying inflation in August and Tokyo CPI figures for September

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Fed, BoE and BoJ in action this week

18 September 2023

Emily Nicol
, 
Chris Scicluna
  • While the BoE is likely to hike rates by a further 25bps and accelerate the pace of QT, it might signal a stronger likelihood that it has reached peak rates; and the Fed is widely expected to take a pause in its rate hiking cycle, while the BoJ will maintain its negative policy rate and YCC parameters.
  •  Data-wise, August inflation reports are due from the euro area, UK, as well as Japan. 
  • In terms of economic activity, the flash September PMIs from the major economies will be watched closely for an update on economic momentum at the end of Q3.

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