Next week, there are several important economic events to keep an eye on. On Monday, the US NAHB Housing Market Index will be released. Tuesday will bring the RBA Meeting Minutes, Canada CPI, US Housing Starts, and Building Permits. Wednesday will see the PBoC LPR, UK CPI, and Eurozone Wage Growth data. Thursday includes Canada PPI and US Jobless Claims, while Friday will feature Flash PMIs from Australia, Japan, EU, UK, and the US, as well as Japan CPI, UK Retail Sales, and Canada Retail Sales.
Starting with the Canadian CPI data on Tuesday, the year-on-year figure is expected to be 1.9% compared to the previous 1.6%, while the month-on-month figure is forecasted to be 0.3% versus the prior -0.4%. The focus will be on underlying inflation measures, such as the Trimmed Mean CPI and Median CPI. The Bank of Canada is currently more focused on economic growth as inflation has remained within the target range. The market is pricing in a 35% chance of a 50 basis point cut in December, so any lower than expected inflation readings could increase those probabilities.
On Wednesday, the PBoC is expected to keep the LPR rates unchanged. The UK CPI year-on-year figure is expected to be 2.2% compared to the previous 1.7%, with the month-on-month figure forecasted at 0.5% versus 0.0% prior. The Core CPI is expected to be 3.2%. The UK has seen a recent miss in inflation data, along with soft labor market reports and lower than expected GDP growth. The market currently prices in a 22% chance of a 25 basis point cut in December, but this could change if there is another miss in CPI data.
Thursday’s US Jobless Claims data remains important for monitoring the labor market. Initial Claims are expected at 223K versus 217K prior, and Continuing Claims are expected to decrease. Friday will be focused on Flash PMIs from major economies like the Eurozone, UK, and US, which could impact interest rate expectations.
In Japan, the Core CPI year-on-year figure is expected to be 2.2% compared to the previous 2.4%. Despite inflation not being a major concern in Japan, the probability of a rate hike in December has increased due to the depreciation of the Japanese Yen.
Overall, next week’s economic events will provide valuable insights into the state of various economies and could influence market expectations for monetary policy decisions. It is important to closely monitor these indicators for potential trading opportunities and to stay informed about global economic trends.
