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All eyes on the Fed and BoE this week

Chris Scicluna
Emily Nicol
  • Japanese IP declined in September as autos production went into reverse
  • Chinese PMIs disappointed in October as tight Covid restrictions continued to weigh on activity 
  • German retail sales beat expectations in September but downwards trend still in play

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BoJ maintains ultra-accommodative policy stance

Emily Nicol
Chris Scicluna
  • Tokyo core inflation surges to highest rate since 1989 due to higher prices of processed food and services
  • Initial estimates of inflation in October in the euro area member states are decidedly mixed, with big upside surprises in France and Germany’s largest state
  • Contrary to expectations of a contraction, German GDP grew 0.3%Q/Q in Q3; French and Spanish GDP slowed to 0.2%Q/Q in Q3

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ECB set to raise rates by 75bps

Chris Scicluna
Emily Nicol
  • German consumer confidence improves very slightly, although remains close to historically weak levels
  • CBI distributive trades survey likely to signal ongoing weakness in UK retail sales at the start of Q4

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Japanese underlying price pressures continue to broaden

Chris Scicluna
Emily Nicol
  • BoJ’s trimmed mean CPI hits 2% for the first time
  • German ifo business survey likely to signal increased probability of recession; ECB bank lending survey to flag tightening of credit standards
  • Politics will remain the focus in the UK, as the markets’ preferred candidate Rishi Sunak will be confirmed as Prime Minister; data-wise, the CBI industrial trends survey is likely to highlight the ongoing challenges facing UK manufacturers

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UK set to announce new Prime Minister

Chris Scicluna
Emily Nicol
  • Major government bonds continue to make gains on reports that the Fed is considering how best to manage a slowing in the pace of its rate hikes; Gilts outperform after yesterday’s confirmation that former Prime Minister Boris Johnson will not run in the Conservative leadership election, with former Chancellor Rishi Sunak looking well set to be confirmed the UK’s third PM of 2022
  • Flash PMIs improved in Japan, but set to signal a steeper pace of contraction in the euro area and UK
  • ECB likely to raise rates on Thursday by another 75bps, but BoJ on Friday set to leave its ultra-accommodative policy stance unchanged

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