A review of the week past and the week ahead

Charts (3)

What mattered last week:

  • The S&P500 fell -0.53% as global coronavirus cases continued to surge and stimulus talks remained stalled.
  • As well as nerves ahead of the U.S. election, now just one week away.
  • Partially offset by good economic data was well as September quarter earnings surprises.
  • Volatility, as measured by the VIX index, closed higher at 27.6.
  • U.S. 10-year yields closed 9bp higher, near 0.84%.
  • Gold closed mostly unchanged near $1902.
  • Crude oil closed -3.09% lower at $39.85/bbl.
  • The ASX200 closed flattish, near 6167.00.
  • In FX, the AUDUSD closed higher near .7140, helped by a weaker U.S. dollar.

For the week ahead, the key events are:

Australia: Q3 CPI (Wednesday), private sector credit (Friday).

  • Q3 CPI (Wednesday): Headline inflation is expected to rise by 1.5% q/q after the end of free childcare and a rebound in petrol prices, taking the y/y rate to back into positive territory at 0.6%. Underlying inflation is expected to rise by  0.3% q/q taking the y/y rate to 1.3%.

New Zealand: Balance of trade.

China: Industrial profits, NBS manufacturing, and non-manufacturing PMI.

Japan: Bank of Japan interest rate decision (Thursday), employment, and industrial production (Friday).

  • Bank of Japan interest rate decision (Thursday): The Bank of Japan is expected to leave monetary policy unchanged and reiterate a strong easing bias.

U.S: Durable goods, house price index, CB consumer confidence (Tuesday), Q3 GDP, jobless claims (Thursday), personal income, personal spending, core PCE price index (Friday).

  • GDP (Thursday):  3Q GDP is expected to come in at +32.5% annualized after a -31.4% annualized decline in Q2.

September quarter earnings season continues with reports due this week from AMZN, AAPL, FB, and GOOG.

Canada: BoC interest rate decision, (Thursday), building permits, and GDP (Friday).

  • BoC interest rate decision (Thursday): The BoC is expected to leave the overnight target at 0.25%, the forward guidance on rates and QE unchanged, as well as its purchases of C$5bn/week of GoC bonds.

Euro Area: German Ifo business survey (Monday), German employment and ECB interest rate meeting (Thursday), German CPI, GDP, and retail sales as well as EA GDP, unemployment and CPI (Friday).

  • ECB interest rate meeting (Thursday): The ECB is expected to leave monetary policy on hold this month before an expected increase in QE in December.

UK: Nothing of note.

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