Macroeconomics: The Day Ahead for 23 October

  • Central bank speakers, Fed Beige Book and corporate earnings likely to overshadow very light run of statistics; South Africa CPI and US  Existing Home Sales; Lagarde, Lane, Bailey and Ueda; Boeing and  Tesla earnings

  • U.S.A.: Beige Book expected to see slight upgrade to growth, but focus  on overall outlooks, and labour demand picture

  • U.S.A.: Existing Home Sales seen edging higher boosted by lower mortgage rates; low inventories to remain a headwind

EVENTS PREVIEW

The day is once again dominated by central bank speakers and corporate earnings, with the Fed’s Beige Book likely to be of greater importance than the statistical schedule of Singapore and South Africa CPI, US Existing Home Sales and provisional Eurozone Consumer Confidence. The array of central bank speakers includes ECB’s Lagarde & Lane, Fed’s Bowman, BoE’s Bailey and very late in the day BoJ’s Ueda, whose topic is “Where is Japan on Inflation and Monetary Policy?”, potentially a significant market mover. US corporate earnings highlights are likely to feature Boeing, Coca-Cola, Hilton Worldwide, Newmont Mining, NextEra Energy, Rollins and Tesla, while elsewhere there are reports from China Coal Energy, Deutsche Bank, Heineken, Iberdrola and Lloyds Banking amongst others. While there are a good many overarching influences on markets at the current juncture, above all the wars in the Middle East and Ukraine and the outlook for interest rates in the US and other developed economies, the US election will continue to dominate for at least the next weeks, and quite possibly for a protracted period thereafter if the mountain of related litigation awaiting in US courts is any guide.

** U.S.A. – Fed Beige Book **
– The Fed’s Beige Book is expected to see growth described as ‘modest’ relative to the previous edition in which a relative majority saw activity either unchanged or declining, though the focus will be on outlooks, which the run of corporate earnings reports suggests will be rather mixed. It will offer some insights to the level of disruption from Hurricanes Helene and Milton, which yesterday’s Richmond Fed surveys suggest was very modest, as well as the impact of the port and Boeing strikes, and a more measured and nuanced perspective on labour demand, following the unexpectedly robust September Payrolls report (largely education and election related given the surge in govt related payrolls). The first of this week’s Home Sales reports are expected to see Existing rise 0.5% m/m, boosted by lower mortgage rates in the aftermath of the Fed’s 50 bps rate cut, though a shortage of Existing Home supply will likely remain more than evident.

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