Events to Look Out for Next Week

Andria Pichidi

November 12, 2021

Bond market volatility has picked up considerably in recent weeks, with markets swinging between excessive tightening concerns and growth pessimism. Central banks are struggling to stabilise expectations and may have to rethink their communication strategy as the monetary policy cycle turns amid ongoing uncertainty over the global outlook. The economic agenda ahead is expected to be a busy one, as it’s packed with central banks’ official speeches. Data however will also dominate volatility as the week includes leading indicators such as GDP, Retail Sales, and CPI from the largest economies in the world.

Sunday – 14 November 2021

Gross Domestic Product (JPY, GMT 23:50) – GDP is the economy’s most important figure. The preliminary Q3 GDP for Japan is expected to slowdown dramatically at -0.8% y/y from 1.9% y/y, and -0.2% q/q from 0.5% q/q.

Monday – 15 November 2021

Retail Sales & Ind. Production (CNY, GMT 02:00) – Chinese annualized Retail Sales are expected to eased to 3.5% from 4.4% last time and annualized Industrial production is expected to eased to 3.0% from 3.1%.
NY Fed Empire State Index (USD, GMT 13:30 ) – The Empire State index should tick up to 20.0 in November after a drop to 19.8 in October from 34.3, versus a 43.0 all-time high in July and a 7-month low of 3.5 in January. Though producer sentiment has bounced from the recent August low, a continued broad pull-back in sentiment is expected as the lift from stimulus and vaccines wanes. Levels should remain historically robust despite the expected drop into 2022, with support from factory efforts to rebuild inventories in the face of widespread supply chain disruptions and with bottlenecks at US ports. Demand for most industries since 2020 has rebounded well above pre-pandemic levels.

Tuesday – 16 November 2021

RBA Meeting Minutes (AUD, GMT 00:30) – The minutes could spark some light on the RBA’s next actions. Note that the latest quarterly policy statement, with updated projections sounded upbeat on the recovery, but cautious on wage growth, which backs official assertions that rates won’t rise for a long time to come.
Employment change & ILO rate (GBP, GMT 07:00) – UK Earnings with the bonus-included figure are seen slightly lower to 7.0% (3 mo/y) in the three months to September from 7.2%. The UK ILO unemployment rate should have steadied at 4.5%.
US Retail Sales (USD, GMT 13:30) – Expectations are for a 0.4% October retail sales headline climb with a 0.4% ex-auto increase, following respective September increases of 0.7% and 0.8%. A continued unwind of the lift from Q1 stimulus is anticipated and a hit from the September end for extended jobless benefits. The retail sales should stabilize through Q4 following the post-stimulus pull-back, though service sector activity should continue to expand. We may also see some pull-back ahead of holiday spending into October on reports of shortages.

Wednesday – 17 November 2021

PPI and CPI (GBP, GMT 07:00) – More UK data, with Inflation from producer and consumer spending both expected to show a rise for October, with a growth at 1.0% m/m from 0.4% m/m and 0.8% m/m from 0.3% m/m respectively. With inflation already running above target and wages set to go up, and as October CPI is expected higher, is unlikely to change the picture for the BoE significantly ahead of the early November meeting.
Consumer Price Index and Core (EUR, GMT 10:00) – On the inflation front, nothing is expected to change. Given that monetary policy acts with a time lag the projections seem to back the ECB’s assertion that an expansionary policy remains necessary, and that the spike in headline inflation is mainly driven by transitory factors such as supply chain disruptions. Despite all this and despite the ECB’s best efforts to play down the importance of the pick-up in current headline rates, the longer term inflation expectations have moved closer to 2%.
Consumer Price Index and Core (CAD, GMT 13:30) – CPI surged to a 4.4% (y/y, nsa) pace in September from the 4.1% growth rate in August. That’s the fastest pace of appreciation since February 2003. The average of the BoC’s three core CPI measures was 2.7% in September (y/y, nsa), up from 2.6% in August. Both the total and core measures were in-line with expectations. The BoC faces the same policy conundrum as the FOMC, with hotter inflation, both in magnitude and persistence, but slack in the labor market.
Housing Starts and Building Permits (USD, GMT 13:30) – Housing starts are expected to climb to a 1.610 mln pace in October from 1.555 mln in September and 1.580 mln in August, versus a 15-year high of 1.725 mln in March. Permits are expected to improve to 1.660 mln from 1.586 mln in September, versus a 15-year high of 1.883 mln in January.
Fed Williams, Waller and Evans speech (USD, GMT 14:10 & 17:40 & 21:05 respectively)

Thursday – 18 November 2021

Philadelphia Fed Manufacturing Survey (USD, GMT 13:30) – The Philly Fed index is seen slipping to 21.0 in November after a decline to 23.8 in October, versus a 48-year high of 50.2 in April and a previous 11-month high of 30.1 in January.
Fed William and Evans speech (USD, GMT 14:30 & 19:00 respectively)

Friday – 19 November 2021

UK Retail Sales (GBP, GMT 07:00) – Expectations are for the headline number to be -0.4% on a y/y basis, higher from -1.3%, last time, and the m/m data for October to be higher at 0.5% from -0.2% last time.
ECB Lagarde speech (EUR, GMT 08:00)
German Buba President Weidmann speech (EUR, GMT 13:00)
Retail Sales (CAD, GMT 13:30) – Canada August retail sales rose 2.1% overall, after falling -0.1% in July (was -0.6%). The headline results were a bit better than expected. The September Retail sales are seen steady.
Fed William and Evans speech (USD, GMT 14:30 & 19:00 respectively)
Fed Waller and Clarida speech (USD, GMT 15:45 & 17:15 respectively)

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Andria Pichidi

Market Analyst

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