Market News & Analysis
What mattered last week and a preview of the week ahead
Tony Sycamore October 21, 2019 10:30 AM
What mattered last week:
- U.S. stocks rallied following positive surprises in September quarter earnings reports and a reduction in the tail risks associated with Brexit and U.S. - China trade tensions.
- Also supporting stocks, weaker than expected U.S. retail sales for September following on from a low CPI number, has increased the probabilities that the Fed cuts rates again next week.
- Partly offsetting goodwill from the U.S. - China trade truce, the U.S. House passed a bill supporting protesters in Hong Kong.
- The IMF revised lower its global growth forecast to 3% for 2019 and 3.4% for 2020.
- Chinese GDP slowed to 6% y/y, the slowest pace since the series began in 1992 and weaker than the consensus forecast of 6.1% y/y.
- Locally, the AUDUSD closed the week above .6850 aided by better Australian jobs data for September and upbeat comments from RBA Governor Lowe.
- The ASX 200 closed the week near ~6650, helped higher by gains in the energy, health and the financial sector.
For the week ahead, the key events are:
Australia: Nothing of note.
New Zealand: Balance of trade (Wednesday).
China: House price index (Monday).
Japan: Balance of trade (Monday), Jibun bank PMI’s (Thursday).
U.S.: Existing home sales (Wednesday), house price index, durable goods (Thursday), Markit flash PMI’s, new home sales (Friday).
- Markit composite PMI (Friday): The expectation is for a modest recovery in the October PMI to 51.6 from 51.00 in September.
September quarter earnings reporting season continues with reports from companies including Microsoft, Amazon, Alphabet (ex-Google), Boeing and 3M.
Canada: Retail sales (Tuesday), wholesale sales (Wednesday).
Euro Area: German PPI (Monday), EA consumer confidence, German and EA Markit PMI’s, ECB interest rate meeting (Thursday), German consumer confidence and IFO (Friday).
- ECB interest rate meeting (Thursday): The ECB meeting this week is expected to be a nonevent following the significant easing package announced at the ECB’s September meeting.
UK: A vote on PM Johnson’s withdrawal agreement (Monday or Tuesday).
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