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What mattered last week and a preview of the week ahead

What mattered last week:

  • U.S. stocks rallied for a third straight week, supported by good September quarter earnings reports and increased optimism that we may have seen a low point in global growth.
  • As well as good news on the trade front with President Trump confirming trade talks are progressing well and that China “want to make a deal”.
  • Despite a setback to the Brexit timetable last week most agree that the Boris Johnsons Brexit deal will be passed before year-end.
  • Some positive global economic data emerged with business PMI data in the U.S. and Europe showing signs of stabilisation.
  • The ASX 200 closed the week up almost 1.5%, near 6740, aided by resource and IT stocks and offsetting losses in the interest rate sensitive real estate and utility sectors.
  • The AUDUSD closed the week above .6800c for a second straight week, consolidating recent gains.

For the week ahead, the key events are:

Australia: Q3 CPI (Wednesday), private sector credit and building approvals (Thursday), PPI (Friday).

  • Q3 CPI (Wednesday): Headline inflation is expected to rise by 0.6% in Q3, with the annual rate rising to 1.7%. Trimmed mean, the RBA’s preferred measure of inflation is expected to print at 0.4% in Q3 keeping the annual rate at 1.5%.

New Zealand: Building approvals, ANZ business confidence (Thursday).

China: NBS manufacturing and non-manufacturing PMI’s (Thursday), Caixin manufacturing PMI (Friday).

Japan: Retail sales (Wednesday), industrial production, consumer confidence, BoJ interest rate meeting (Thursday), employment report (Friday).

U.S.: S&P Case-Shiller house price index, pending home sales, Q3 GDP (Wednesday), FOMC interest rate meeting, personal spending, PCE inflation (Thursday), non-farm payrolls, ISM manufacturing (Friday).

  • FOMC (Thursday): The FOMC is expected to cut the fed funds rate target range by 25bp, to 1.50-1.75%, and note that it "will act as appropriate to sustain the expansion" therefore keeping the door open for additional rate cuts in 2020 if needed.

September quarter earnings reporting season continues with reports from companies including Apple, Facebook, Berkshire Hathaway and Pfizer.

Canada: Bank of Canada interest rate meeting, GDP and PPI (Thursday), Markit manufacturing PMI (Friday).

  • Bank of Canada (Thursday): The Bank of Canada is expected to keep rates unchanged at 1.75% and maintain a cautious outlook.

Euro Area: German employment, EA consumer inflation expectations (Wednesday), German inflation, retail sales, EA Q3 GDP, CPI and employment (Thursday).

UK: GFK consumer confidence (Thursday), Markit/CIPS manufacturing PMI (Friday).


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