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Flash inflation, euro business surveys & Fed minutes due this week

25 November 2024

Emily Nicol
  • A key focus in the major economies this week will be new inflation estimates, including the flash euro area HICP print for November on Friday. Headline inflation is expected to rise again this month to 2.3%Y/Y, the highest since July, due to a further upwards impulse in energy and core components amid unfavourable base effects. In Japan, Tokyo CPI figures (due Friday) are expected to show that headline inflation jumped back above target.
  • After last week’s downbeat flash PMIs, this morning’s German ifo survey results flagged a further deterioration in current business conditions to the worst since the global financial crisis outside of the initial Covid-19 slump. The Commission survey (Thursday) will also likely flag a deterioration in business conditions amid heightened political uncertainties in Germany, France and the US.
  • At the BoE Watchers’ Conference this morning, Deputy Governor Lombardelli suggested that further gradual easing in the UK will likely be appropriate, probably implying that she’ll support one rate cut per quarter next year.

 

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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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ECB poised for second consecutive cut, while September CPI lands

14 October 2024

Emily Nicol
  • The ECB’s seems bound to cut rates on Thursday for a second successive meeting and the third time since June, while the Governing Council’s forward guidance is likely to repeat that a data-dependent and meeting-by-meeting approach will be maintained
  • In the UK, highlights include September CPI (Wednesday) and August labour market figures (tomorrow); we expect headline inflation to fall below to 1.8%Y/Y, the lowest rate since April 2021 due in part to lower energy prices, but services inflation is also likely to ease allowing core inflation to drop; the unemployment rate is forecast to remain steady at 4.1%, but total pay growth is expected to drop to its softest since November 2020
  • In Japan, September CPI figures (Friday) are expected to show that headline CPI fell back around ½ppt to 2.5%Y/Y due to the extension of government utility subsidies, but the BoJ’s preferred core measure (excluding fresh foods and energy) is expected to remain steady bang in line with its 2% target; September goods trade and August tertiary activity figures (Thursday) are also due

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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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