This week will be crucial for Fed rate hike expectations, with the September inflation report being the highlight. The forecast is for both headline and core inflation to increase by 0.3% month-over-month in September. However, the year-over-year headline inflation is expected to drop slightly to 3.6%, and core inflation’s annual reading is expected to ease from 4.3% to 4.1%. Traders will also be closely monitoring the PPI release on Wednesday before Thursday’s CPI release and weekly jobless claims. Additionally, market participants will pay attention to the University of Michigan sentiment report on Friday, particularly the near-term inflation expectations. Last month, consumers anticipated a 3.2% rise in prices over the next 12 months, the lowest level since 2021. The market is also anticipating clarity on who will be the frontrunner to become the speaker of the House, which plays a critical role in avoiding a government shutdown in mid-November. Furthermore, banks’ earnings will be reported on Friday, and many expect the financials to highlight a weaker consumer due to increased delinquencies and exhausted savings. Notably, JPMorgan, Wells Fargo, Blackrock, and Citigroup will release their earnings before the New York open. Throughout the week, there will be 14 appearances by Fed officials, with Bostic and Collins speaking after the inflation report and Harker making a lone appearance on Friday. In the Eurozone, there will be limited activity, with ECB President Christine Lagarde’s appearance being among the few highlights. The release of ECB minutes on Thursday is anticipated to be the key event, as the dovish hike was a topic of debate. In the UK, the focus will be on various Bank of England appearances, which comes at a time of uncertainty for central banks, especially in the UK. The MPC decision to leave interest rates unchanged and the neutral language used during the announcement surprised the markets last month. GDP figures will also be released on Thursday. In Russia, inflation data on Wednesday will be significant, with expectations for it to rise to 5.8%. This increase in inflation puts pressure on the central bank to continue raising rates, especially with the rouble still near 18-month lows. In South Africa, there will be a couple of economic releases, but none are expected to be game-changing. Turkey will have a quiet week as well, but unemployment and industrial production figures on Tuesday are worth noting. Switzerland’s only release will be PPI on Friday. In China, financial markets will be back in action after the Golden Week holiday. Key data releases include M2 money supply, new yuan loans, and vehicle sales for September on Wednesday. On Friday, the focus will be on consumer and producer prices inflation data for September, with expectations of a slight increase in consumer prices and a smaller contraction in producer deflation. The balance of trade data for September will also be released on Friday. In India, industrial production data for August is due on Thursday and is expected to show a rise of 9.3% year-over-year. The inflation rate for September is also anticipated to decrease slightly. On Friday, the balance of trade data for September will be released. In Australia, consumer and business confidence data will be released on Tuesday, with an expected improvement in the Westpac consumer confidence but a fall in NAB business confidence. New Zealand will have two key data releases, focusing on food inflation for September and the manufacturing PMI for September. In Japan, current account data will be released on Tuesday, and banking lending and PPI data for September on Wednesday. Singapore will have two significant events on Friday, with the release of the advance estimate for Q3 GDP growth and the Monetary Authority of Singapore’s semi-annual monetary policy statement.
