Week Ahead 46

Week Ahead 46

Next week the most important releases include US inflation, retail sales and industrial production; UK inflation, employment, wages and retail trade; Germany Q3 GDP growth and investor morale; Japan Q3 GDP growth; China industrial output, retail sales and fixed asset investment; India inflation, foreign trade and industrial production; Australia consumer and business morale, and employment figures; and interest rate decisions from Mexico, Indonesia, Thailand and the Philippines.

The highly anticipated US consumer price index report for October will probably show an acceleration in inflation to 2.5 percent from September’s 2.3 percent while the core inflation is set to remain unchanged at 2.2 percent. Still, figures are likely to remain above the Fed’s 2 percent target and to support the FOMC’s decision to reaffirm its monetary tightening stance, pointing to a fourth interest rate hike this year in December. Meanwhile the country’s retail sales and industrial production figures for October will also be watched. Retail trade is expected to expand at a strong rate, while industrial output growth is set to ease from the previous month. Other important data include: foreign prices; business inventories; NY Empire State Manufacturing Index; Philadelphia Fed Manufacturing Index; overall capital flows; and the government’s monthly budget statement.


The UK will also be publishing October’s inflation data, alongside producer prices and retail price index. Consumer prices should rise 2.5 percent, faster than 2.4 percent in the previous month, and the core inflation is also expected to head higher, rising to 2 percent from September’s 1.9 percent. In addition, employment figures are likely to show unemployment rate holding at 4 percent in the three months to September and average weekly earnings hitting a three-year high of 3 percent year-on-year, potentially boosting real incomes. Finally, retail sales will be in the spotlight, with forecasts pointing to a modest rebound following a steep drop in September.

Elsewhere, investors continue to see third-quarter GDP updates for several countries across Europe. In particular, the Eurostat will publish its second estimate of third-quarter GDP growth for the Euro Area while Destatis will release a flash estimate for Germany. The bloc’s largest economy probably shrank as the export sector was hit over the summer months amid persistent trade tensions and temporary factors like the new emissions norms for autos. Other key highlights include Eurozone and Italy industrial production; German ZEW Economic Sentiment Index; Sweden inflation; and Turkey unemployment rate. Investors also await Italy’s budget developments, as the European Commission has given the country until November 13th to submit revised spending plans.

In Japan, analysts are eyeing the publication of the preliminary estimate of third-quarter GDP growth rate, which is expected to show a contraction of 0.3 percent from the previous period. Meanwhile, China is releasing industrial production, retail trade, fixed asset investment, which combined could add to concerns about the world’s second-largest economy. Meanwhile, India’s inflation likely slowed to a 12-month low of 3.67 percent in October, remaining below the central bank’s medium-term target for a third consecutive month. Other key highlights for the Asia-Pacific region include: Australia Westpac Consumer Confidence, NAB Business Confidence, employment figures and wage data; Hong Kong and Malaysia Q3 GDP figures; India industrial production, wholesale prices and trade balance; South Korea jobs data; and interest rate decisions from Indonesia, Thailand and the Philippines.

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