The markets month ahead: key events for your trading diary in October

Get a look at the coming month’s important market-moving events with our October trading preview. 

Economic events to watch in October 

OPEC-JMMC meetings – Monday 4th October  

The month begins in earnest with OPEC-JMMC meetings. OPEC+ comes together for its monthly policy talks. No shocking surprises are expected this month. Instead, we’ll probably see a rubber-stamping of the planned output increase of 400,000 bpd.  

RBA rate statement – Tuesday 5th October  

The Reserve Bank of Australia releases its newest rate statement at the start of the month. Markets forecast no hike for the foreseeable future. The cash rate will probably stay at its historic low. 

RBNZ rate statement – Wednesday 6th October  

Joining its Australian cousin in starting the month with a rate decision is the Reserve Bank of New Zealand. Economists think an increase in the 0.2% cash rate will come – but not the 0.5% increase forecast. 

US nonfarm payrolls – Friday 8th October 

Jerome Powell and the Fed, plus the wider markets, will be watching the month’s NFP data carefully. August’s data missed the mark by miles – will September’s stats point towards a US labour market surge? 

US CPI data – Wednesday 13th October 

Consumer Price Index rises cooled in August, backing the Fed’s stance that current high prices are all transitionary. Month-on-month price gains slowed to 0.3%. September’s CPI stats are released on Wednesday 13th of October. 

US retail sales data – Friday 15th October 

Retail sales across America picked up an unexpected bump in August. Sales were up 0.7% according to the Census Bureau. Observers were calling for a 0.7% decline, driven by rising Delta-variant COVID cases. Will we see an upward swing in September too? 

UK CPI data – Tuesday 20th October 

UK inflation is running hot. Last month’s report showed it growing at the fastest rate since records began, rising at 3.2%. It may be all transitionary, but if inflation punches above the Bank of England’s 4% target, then the UK’s central bank may be forced to act. 

European PMIs – Friday October 22nd 

Brace for the monthly European flash PMI blitz with all the key economic activity indicators from France, Germany, and the EU all inbound. Eurozone composite PMI readings for September missed expectations of 58.5 coming in at 56.1. Still in growth, but it looks like activity is starting to slow. 

Bank of Canada rate statement – Wednesday October 27th 

The first rate statement of Justin Trudeau’s third term comes this month. Governor Tiff Macklem and co. stuck to their guns in September, keeping the 0.25% rate in place and the QE pace the same. It’s probable October’s statement will bring much the same. 

ECB Press Conference – Thursday October 28th  

The European Central Bank scaled back its bond-buying programme in September in a bid to cool soaring inflation. Its October moves will likely all come down to how EU CPI reacted to the change. Rates stayed at 0% and it’s likely they will in the mid-term. 

Major economic data 

Date  Time (GMT+1)  Asset  Event 
Mon Oct-04  8:00am  EUR  Spanish Unemployment Change 
  All Day  All  OPEC Meetings 
  All Day  All  OPEC-JMMC Meetings 
       
Tue Oct-05  4:30am  AUD  RBA Rate Statement 
  4:30am  AUD  Cash Rate 
  Tentative  JPY  BOJ Gov Kuroda Speaks 
  3:00pm  USD  ISM Services PMI 
       
Wed Oct-06  2:00am  NZD  Official Cash Rate 
  2:00am  NZD  RBNZ Rate Statement 
  1:15pm  USD  ADP Non-Farm Employment Change 
  3:30pm  OIL  Crude Oil Inventories 
       
Thu Oct-07  1:30pm  USD  Unemployment Claims 
  3:00pm  CAD  Ivey PMI 
       
Fri Oct-08  1:30am  AUD  RBA Financial Stability Review 
  1:30pm  CAD  Employment Change 
  1:30pm  CAD  Unemployment Rate 
  1:30pm  USD  Average Hourly Earnings m/m 
  1:30pm  USD  Non-Farm Employment Change 
  1:30pm  USD  Unemployment Rate 
  Tentative  USD  Treasury Currency Report 
       
Tue Oct 12  3:00am  CNH  GDP q/y 
  3:00am  CNH  Retail Sales y/y 
  10:00am  EUR  ZEW Economic Sentiment 
  10:00am  EUR  German ZEW Economic Sentiment 
  3:00pm  USD  JOLTS Job Openings 
  6:00pm  USD  10-y Bond Auction 
       
Wed Oct-13  1:30pm  USD  CPI m/m 
  1:30pm  USD  Core CPI m/m 
  6:01pm  USD  30-y Bond Auction 
  7:00pm  USD  FOMC Meeting Minutes 
       
Thu Oct-14  1:30am  AUD  Employment Change 
  1:30am  AUD  Unemployment Rate 
  1:30pm  USD  PPI m/m 
  1:30pm  USD  Core PPI m/m 
  1:30pm  USD  Unemployment Claims 
  4:00pm  OIL  Crude Oil Inventories 
       
Fri Oct-15  7:00am  GBP  Retail Sales m/m 
  1:30pm  USD  Core Retail Sales m/m 
  1:30pm  USD  Retail Sales m/m 
  1:30pm  USD  Empire State Manufacturing Index 
  3:00pm  USD  Prelim UoM Consumer Sentiment 
       
Mon Oct-18  2:15pm  USD  Industrial Production m/m 
  3:30pm  CAD  BOC Business Outlook Survey 
Tue Oct-19  1:30am  AUD  Monetary Policy Meeting Minutes 
       
Wed Oct-20  7:00am  GBP  CPI y/y 
  1:30pm  CAD  CPI m/m 
  1:30pm  CAD  Common CPI y/y 
  1:30pm  CAD  Core Retail Sales m/m 
  1:30pm  CAD  Median CPI y/y 
  1:30pm  CAD  Retail Sales m/m 
  1:30pm  CAD  Trimmed CPI y/y 
  3:30pm  OIL  Crude Oil Inventories 
  10:45pm  NZD  CPI q/q 
       
Thu Oct-21  1:30pm  USD  Philly Fed Manufacturing Index 
  1:30pm  USD  Unemployment Claims 
       
Fri Oct-22  8:15am  EUR  French Flash Manufacturing PMI 
  8:15am  EUR  French Flash Services PMI 
  8:30am  EUR  German Flash Manufacturing PMI 
  8:30am  EUR  German Flash Services PMI 
  9:00am  EUR  Flash Manufacturing PMI 
  9:00am  EUR  Flash Services PMI 
  9:30am  GBP  Flash Manufacturing PMI 
  9:30am  GBP  Flash Services PMI 
  2:45pm  USD  Flash Manufacturing PMI 
  2:45pm  USD  Flash Services PMI 
       
Mon Oct-25  9:00am  EUR  German ifo Business Climate 
       
Tue Oct-26  1:30pm  USD  Core Durable Goods Orders m/m 
  1:30pm  USD  Durable Goods Orders m/m 
  3:00pm  USD  CB Consumer Confidence 
       
Wed Oct-27  1:30am  AUD  CPI q/q 
  1:30am  AUD  Trimmed Mean CPI q/q 
  3:00pm  CAD  BOC Monetary Policy Report 
  3:00pm  CAD  BOC Rate Statement 
  3:00pm  CAD  Overnight Rate 
  3:30pm  OIL  Crude Oil Inventories 
  Tentative  CAD  BOC Press Conference 
       
Thu Oct-28  Tentative  JPY  BOJ Outlook Report 
  Tentative  JPY  Monetary Policy Statement 
  Tentative  JPY  BOJ Press Conference 
  12:45pm  EUR  Monetary Policy Statement 
  12:45pm  EUR  Main Refinancing Rate 
  1:30pm  EUR  ECB Press Conference 
  1:30pm  USD  Advance GDP q/q 
  1:30pm  USD  Advance GDP Price Index q/q 
  1:30pm  USD  Unemployment Claims 
  3:00pm  USD  Pending Home Sales m/m 
       
Fri Oct-29  8:00am  EUR  German Prelim GDP q/q 
  1:30pm  CAD  GDP m/m 
  1:30pm  USD  Core PCE Price Index m/m 
  2:45pm  USD  Chicago PMI 
  3:00pm  USD  Revised UoM Consumer Sentiment 
Sat Oct-30  Day 1  All  G20 Meetings 
       
Sun Oct-31  1:00am  CNH  Manufacturing PMI 
  Day 2  All  G20 Meetings 

Week Ahead: Big banks kick of US earnings blitz

Week Ahead

US earnings season kicks off this week. The large caps will be sharing their earnings reports for Q2 2021. This throws up exciting trading opportunities for investors, as ever, but this quarter’s may be one of the best seasons yet from a corporate perspective. 

Analyst sentiment suggests a bumper quarter is on the way for the large caps. FactSet forecasts suggest a 61.9% growth rate for S&P 500 firms. That would be the highest year-on-year growth rate reported by the index since 2009. 

Big banks dominate earning season’s opening salvos. JPMorgan Chase, Goldman Sachs, Wells Fargo, and Citigroup are amongst those reporting in the first week. 

Earnings season takes on renewed importance this quarter. The market will be using it to gauge which companies are poised to power out of the pandemic economy toward something like normal operating procedures – and which have struggled. 

We’ve put together a US earnings season calendar detailing the large caps sharing earnings reports this quarter. Check it out to see which companies are reporting to plot your trades for the coming season. 

Away from earnings and turning to data, this week sees the release of June’s US consumer price index reading. 

Headline consumer prices rose 5% year-on-year in May – the fastest rate since August 2008. This was also higher than Wall Street expectations. Core inflation, a measure that doesn’t include food or energy prices, was up 3.8%. That was the sharpest rise for nearly three decades. 

May’s data, compiled by the Bureau of Labour Statistics, instigated a debate around whether the Fed should let the economy run hot. Inflation is one of the Fed’s key metrics, so similar readings in June may prompt a policy change or a rate hike in order to cool the hot post-lockdown economy. 

Fitch suggests CPI will continue to spike well into 2022. The ratings agency believes supply line issues won’t alleviate any time soon, thus will continue to drive prices of consumer goods upward.  

Fitch’s forecasts call for an overall 4.5% yearly rise in core CPI inflation by year’s end 2021, with non-core coming in at 4.1%. Core inflation would then drop to 2.5% by mid-2022. 

We’ll also see the latest US retail sales data this week. The markets will be looking to see if the 1.3% drop in overall sales and 0.7% drop in core retail sales registered in May was a blip, or whether the trend will have continued into June. 

Despite these small monthly decreases, retail sales are up 28.1% on a yearly basis.  

A part explanation for the dip was a trend of consumers turning away from buying goods and finished products and instead turning to experiences. With freedom of movement returning to near normalcy in the United States, spenders are preferring to go out, plan trips, and spend on services, rather than dabbling in some retail therapy. 

Another reason was a 3.4% drop in receipts at car dealerships. The global semiconductor shortage is impacting delivery of new vehicles; thus, sales have started to stall. 

Interestingly, April’s retail sales were revised up at May’s printing. Instead of staying static as was first thought, they actually increased 0.8% month-on-month. 

The Bank of Canada’s newest rate statement is also due. Governor Tiff Macklem confirmed in June that the overnight rate was holding steady at 0.25%, and no changes to the rate were coming any time soon. 

Macklem also committed the Bank to CAD$3bn in weekly Canadian government bond purchases but reiterated that the pace of these would subside as economic recovery progresses. 

Canada was one of the first major economies to begin scaling back its bond purchases in April. Despite this, the economy retracted in April and May, and Q1 GDP growth of 5.6% did not meet expectation, mainly due to winter lockdowns. 

However, the Bank of Canada’s economists are confident recovery will pick up the pace in the coming months. High commodity prices and growth in foreign demand are expected to act as economic tailwinds going forward. 

A tapering of bond purchases is expected with July’s statement on the 14th 

Major economic data 

Date  Time (GMT+1)  Asset  Event 
Tue 13-Jul  1.30pm  USD  CPI m/m 
  1.30pm  USD  Core CPI m/m 
       
Wed 14-Jul  3.00am  NZD  RBNZ Rate Statement 
  3.00am  NZD  Cash Rate 
  1.30pm  USD  PPI m/m 
  1.30pm  USD  Core PPI m/m 
  3.00pm  CAD  BOC Monetary Policy 
  3.00pm  CAD  BOC Rate Statement 
  3.00pm  CAD  Overnight Rate 
  3.30pm  OIL  Crude Oil Inventories 
  Tentative  CAD  BOC Press Conference 
       
Thu 15-Jul  2.30am  AUD  Employment Change 
  2.30am  AUD  Employment Rate 
  3.00am  CNH  GDP q/y 
  1.30pm  USD  Philly Fed Manufacturing Index 
  1.30pm  USD  Unemployment Claims 
  3.30pm  GAS  US Natural Gas Inventories 
  11.45pm  NZD  CPI q/q 
       
Fri 16-Jul  1.30pm  USD  Retail sales m/m 
  1.30pm  USD  Core retail sales m/m 

 

Key US earnings data 

Tue 13 Jul  Wed 14 Jul  Thu 15 Jul 
JPMorgan Chase & Co   Bank of America Corp    
     
Goldman Sachs Group Inc   Citigroup Inc   Morgan Stanley  
     
PepsiCo Inc      
     
Wells Fargo & Co      

Week Ahead: UK Q1 GDP + US retail sales & CPI releases

Week Ahead

The UK’s Q1 GDP figures are released today, setting the tone for the year to come. Will economists’ optimistic outlines ring true? In the US, retail sales and CPI data reports are due, possibly highlighting potential inflation as the economy surges onwards. Elsewhere, Wall Street braces for another earnings blitz. 

UK GDP Q1 to match optimistic outlook? 

First quarter GDP figures are expected to show a milder contraction than first feared as the country entered a period of lockdown. Last week saw the Bank of England said it expects the economy to have contracted by 1.5% in the first quarter. Nevertheless, the quarterly Monetary Policy Report saw the MPC raise its full-year growth outlook for the UK economy to a full 7.25% increase in GDP. 

This view has been mirrored by economists. Instead of a gloomy portrait, estimates instead paint a sunnier view for UK’s economy. Maybe not golden sunlight uplands just yet, but promising numbers. 

Consensus estimates forecast the drop in GDP to be anywhere between 1 and 2.5%. Barclays, Oxford Economics and ING are cleaving closer to the top end, predicting a 2-2.5% decline. Deloitte, on the other hand, puts the figure at -1.7%. 

We keep banging the vaccine drum, but the impact of the speedy rollout and implementation of a robust nationwide vaccination regime cannot be underestimated. More and more people are heading back to work; lockdown restrictions are lifting; pubs and restaurants will soon be fully open; construction is preparing for double digit growth.  

Indeed, looking to longer predictions, we could be looking at some of the fastest UK GDP growth for 30 years.  

EY ITEM Club’s spring forecast suggests 6.8% annualised growth for the whole of 2021, with the economy returning to pre-pandemic levels by Q2 2022. Goldman is even more optimistic, according to analyst Sven Jari Stehn, with 7.8% forecast. 

Once lockdown lifts fully, and the economy gets back to normal, we’re probably going to see some of the biggest economic expansion figures for decades. It all depends on how successfully the country navigates out of lockdown. 

All eyes on US CPI as inflation stirs 

Inflation could be about to start nibbling at the US economy. March’s CPI data showed a month-on-month jump, so this week’s release charting price rises in April takes on renewed importance. 

Looking at March’s data consumer prices rose 0.6% against February, while they were 2.6% higher than in March 2020. A 9.1% rise in gasoline fuelled the rise in CPI, which was higher than Dow Jones estimated 0.5% monthly and 2.5% annual growth. 

Inflationary pressure on the economy is going to be one to watch going forward. Higher consumer prices could prove a catalyst towards raising the base rate, something which Fed Chair Jerome Powell has so far steadfastly refused to do. At present, the Fed’s strategy is to let the economy “run hot”. 

But still, markets have been pricing in higher growth an inflation across the year so far. Government bond yields have caused a fair few rumbles this year too, with yields reaching some of their highest levels since before the pandemic. Overall, the opening up of the economy, plus major government stimulus, is contributing to an inflationary environment, so the Fed should be watching this month’s CPI data with a keen eye. 

Can April match March’s smash hit US retail sales? 

We’ve seen the US economy step on the gas in 2021, surging 6.4% in Q1. Across the board, the outlook is brighter, if clouded slightly by the shadow of inflation. April’s retail stats will be reported this week, following a blowout in March, but a change in where US consumers spend their cash could be on the way. 

Total US retail sales grew a huge 9.8% month-on-month in March. A combination of warmer weather, lighter lockdowns, and stimulus spending pushed sales higher. Year-on-year growth was colossal, coming in at 30.4%. 

The highest growth areas were sporting goods (23.5%), clothing (18.3%), and motor vehicles (15.1%). 

However, with the economy opening up again, US spenders may turn their attention to other areas. “Experiences” and trips could see large gains this month, as travel restrictions are loosened, while spenders may also start pumping money into hospitality. This could take further cash out of the retail sector, so growth in April may not be as high as March’s terrific performance. 

Earnings season continues on Wall Street 

Wall Street readies itself for a fresh week of large caps sharing quarterly earnings.  

Some titans are reporting in the next earnings season phase. Disney will be one to watch. Parks have reopened, but that will be too late to make any real impact on Q1 earnings. Instead, the focus will be on its Disney+ streaming service, which hoovered up subscribers across the last year. 

Chinese e-commerce behemoth Alibaba’s Q1 earnings will be in focus too. The giant beat estimates by an average of 19.29% across the previous two quarters and could be on track to do so again. Zack forecasts are in the positive, which is normally a good sign for an upcoming earnings beat. 

See below for a round up of large caps reporting this week.  

Major economic data 

Date  Time (GMT+1)  Currency  Event 
Mon 10-May  02.30am  AUD  Retail sales m/m 
       
Tue 11-May  10.30am  AUD  Annual budget release 
       
Wed 12-May  07.00am  GBP  Prelim GDP q/q 
  1.30pm  USD  CPI m/m 
  1.30pm  USD  Core CPI m/m 
  3.30pm  USD  US Crude Oil Inventories 
       
Thu 13-May  1.30pm  USD  Unemployment Claims 
  3.30pm  USD  US Natural Gas Inventories 
       
Fri 14-May  1.30pm  USD  Retail Sales m/m 
  1.30pm  USD  Core Retail Sales m/m 
  2.15pm  USD  Industrial Production m/m 
  3.30pm  USD  Prelim UoM Consumer Sentiment 

 

Key earnings data 

Date  Company  Event 
Mon 10-May  Duke Energy  Q1 2021 Earnings 
  Air  Q1 2021 Earnings 
  Mariott Inc.  Q1 2021 Earnings 
  Tyson Foods  Q4 2021 Earnings 
  Panasonic Corp.  Q4 2021 Earnings 
     
Tue 11-May  Palantir Technologies  Q1 2021 Earnings 
  Electronic Arts  Q4 2021 Earnings 
  E.ON  Q1 2021 Earnings 
  Alstrom  Q4 2021 Earnings 
  Nissan  Q4 2020 Earnings 
  NAMCO BANDAI  Q4 2021 Earnings 
     
Wed 12-May  Toyota  Q4 2021 Earnings 
  Allianz  Q1 2021 Earnings 
  Deutsche Telekom  Q1 2021 Earnings 
  Merck  Q1 2021 Earnings 
  Bayer  Q1 2021 Earnings 
  Hapag-Lloyd   Q1 2021 Earnings 
  Fujifilm  Q4 2021 Earnings 
  Polyus Gold  Q1 2021 Earnings 
     
Thu 13-May  Alibaba  Q4 2021 Earnings 
  Walt Disney  Q2 2021 Earnings 
  Airbnb  Q1 2021 Earnings 
  Coinbase  Q1 2021 Earnings 
  Petrobras  Q1 2021 Earnings 
  Telefonica  Q1 2021 Earnings 
  BT Group  Q4 2021 Earnings 
  Mitsubishi  Q4 2021 Earnings 
  Suzuki  Q4 2020 Earnings 
  Rakuten  Q1 2021 Earnings 
  Burberry  Q4 2021 Earnings 
     
Fri 14-May  Rosneft  Q1 2021 Earnings 
  Honda  Q4 2021 Earnings 
  UNICHARM  Q1 2021 Earnings 
  Knorr-Bremse  Q1 2021 Earnings 
  Toshiba  Q4 2020 Earnings 

Week Ahead: Big Fed & BoE decisions & US retail sales

Week Ahead

Potential big rate decisions are being made on both sides of the Atlantic this week with the Bank of England and the US Federal Reserve holding meetings. We’ll also get a glimpse of US economic recovery as retail sales data is released. Was January’s upswing a fluke or is sustained growth back in action? 

BoE rate decision: unlikely to change but post-budget outlook has changed 

Interest rates and inflation are expected to take centre stage once again as the Bank of England reveals its latest monetary policy decision this week. 

2% inflation is still the target, and it’s probably that the 0.1% bank rate will remain in place. In February, at the last major BoE rate meeting, the banks Monetary Policy Committee (MPC) members voted unanimously to keep that in place.  

Speaking at a Resolution Foundation event on Friday 5th March, Governor Andrew Bailey said the Bank will not raise interest rates in relation to a rapid economy recovery, saying he would need to see “real evidence” that 2% inflation would be sustainable before any rate hikes are implemented. 

However, Governor Bailey also said the BoE is preparing for negative interest rates in the event of a disappointing recovery. It is also doing the groundwork to be ready if rapid spending caused by the Covid-19 pandemic could lead to increased inflationary pressure. 

Markets don’t expect negative rates to be enacted any time soon. Instead, according to the Financial Times, it’s expected the Bank will raise interest rates in 2022. 

Forecasts have also been adjusted to be in line with Chancellor Rishi Sunak’s stimulus-led budget. According to Bailey, they’re looking stronger, as the new spending-heavy budget should help stimulate the economy and job market, bringing unemployment below the previously predicted 7.75% level. 

“Our last forecast was pre-Budget,” Bailey said, adding that in the next forecast in May, “we will have a lower profile of unemployment in the near term and probably lower throughout”. 

Essentially, the BoE will be looking forwards as always, but it’s unlikely to change its base rate from its current 0.1% when it meets this week. 

FOMC press conference – stick or twist? 

Across the pond the Federal Open Market Committee (FOMC)  meeting will be taking place. It’s pretty much the same story as the BoE meeting, but with a bit of a twist – possibly literally. 

Fed Chair Jay Powell has been sanguine regarding yields, vowing to keep policy steady last week, despite his comments triggering a selloff in long-term treasury debt. 

 Powell said the central bank expected to be “patient” in withdrawing support for the recovery, given that the labour market remained far from the central bank’s goal of full employment and had made little progress in recent months. 

What does this mean ahead of the FOMC meeting? CNBC reports that some technical tweaks could be made to the Fed’s existing monetary policy, stimulated by recent turmoil in the bond markets.  

One could be the reintroduction of Operation Twist, where the Fed sells short-term bills and buys longer-duration bonds. The objective is to nudge up shorter-term rates and drive down those at the longer end, thus flattening the yield curve. The Fed last employed such a tactic roughly a decade ago during the tumultuous European Debt Crisis. 

Another option the Fed could explore would be to increase the rate paid on reserves to cover money markets issues, while also adjusting the rate on overnight repo operations in the bond market. 

Prospects for the US economy have brightened somewhat with a slowing in Covid cases, increased vaccination rollout, and the approval by the house of President Biden’s stimulus package. Nonfarm payrolls showed a very healthy increase in jobs added to the US economy last month, surging by 379,000. 

But bond yields will need to be tackled, especially as the US treasury needs its next bond auctions to go well. The Fed likely to keep buying its $80bn worth of Treasury securities, using them to buy bonds with a four- and half-year duration, according to CNBC, simply because a large supply of extra stimulus is coming, and it will need to raise capital to deal with a potential deficit of $2.3 trillion. 

While no major change is forecast, it’s possible we will see those technical tweaks mentioned above. Bond yields will dominate the conversation, as they have done for the past couple of weeks.  

US retail sales – economic retail therapy? 

Latest US retail sales data is released this week, and it good be more good news for the States’ economy if January’s upward swing continues. 

In the last retail data release, sales were up 5.4% – the largest leap for 7 months – according to the US Census Bureau. The figure sailed past predictions of a small 1.1% rise and were up 7.4% versus January 2020. 

Extra cash in the form of stimulus cheques is expected to be behind January’s rise in retail spending. American citizens were given $600 from the Treasury’s pocket – and higher cheques are on the way as President Biden’s centrepiece stimulus package has been approved by The House. 

In the long term, retailers predict 2021 will be a good year for the sector. Stimulus and vaccines are forecast to make a real impact in the sector, especially if there is a road out of lockdown this year.  

Total overall retails could rise as much as 8.2% across the year to reach over $4.33 trillion in 2021 as more people get the COVID-19 vaccine and the economy reopens, the National Retail Federation (NRF) said in February. Ports are subsequently bracing for a spike in imports of consumer goods. 

According to Census Bureau data, demand picked up across all key categories including cars, electronics, recreational goods, grocery stores, building materials and home goods such as furniture. Non-store retail, including e-commerce, grew by climbed 11% in the last review period, suggesting online retail continues to make gains as access to bricks-and-mortar stores remains restricted. 

Can this continue into February? It’s possible. It depends really on how much ready cash Americans still have to spend on consumer and luxury goods, but strong sales will be a good barometer to judge the pace of US economic recovery. 

Major economic data 

Date  Time (GMT)  Currency  Event 
Tue 16th Mar  12.30pm  USD  Core Retail Sales m/m 
  12.30pm  USD  Retail Sales m/m 
       
Wed 17th Mar  All Day  EUR  Dutch Parliamentary Elections 
  12.30pm  CAD  CPI m/m 
  2.30pm  USD  US Crude Oil Inventories 
  6.00pm  USD  FOMC Economic Projections 
  6.00pm  USD  FOMC Statement 
  6.30pm  USD  FOMC Press Conference 
  9.45pm  NZD  GDP q/q 
       
Thu 18th Mar  12.30am  AUD  Employment Change 
  12.30am  AUD  Unemployment Rate 
  12.00pm  GBP  MPC Official Bank Rate Votes 
  12.00pm  GBP  Monetary Policy Summary 
  12.00pm  GBP  Official Bank Rate 
       
Fri 19th Mar  12.30pm  CAD  Core Retail Sales m/m 
  12.30pm  CAD  Retail Sales m/m 

 

Key earnings data 

Date  Company  Event 
Tue 16th Mar  Volkswagen  Q4 2020 Earnings 
     
Wed 17 Mar  BMW  Q4 2020 Earnings 
  NorNickel  Q4 2020 Earnings 
     
Thu 18th Mar  Nike  Q3 2021 Earnings 
  Enel  Q4 2020 Earnings 
  FedEx  Q3 2021 Earnings 

Week ahead: Unemployment claims & retail sales released plus FOMC minutes & global PMIs

Week Ahead

A busy week ahead awaits. Firstly, US unemployment claims data is released, showing how deep the pandemic’s ongoing impact on the US labour market really is. US retail sales are released too, following disappointing holiday results. We also have FOMC meeting minutes, while PMI data from around the world is released too. 

Will US unemployment claims grow again? 

The pandemic continues to put employment on a shaky footing. US unemployment claims are reported in the week ahead, and if previous releases are any indicators, the outlook will be a little muddled. 

Claims for the first week of February 2021 had not been reported at the time of writing, but we can get some indicators of what to expect from unemployment claims report for week ending January 30th.  

Department of Labour stats from that time revealed 779,000 claims were made, against 830,000. That was another dip below 900,000, the number of claims seen in consecutive months at the end of 2020, with overall unemployment rate sitting at 6.3% as of February 5th. 

However, some 17.5 million Americans are still claiming some form of unemployment benefit. 7.2m are on Pandemic Unemployment Assistance, which offers jobless insurance to gig workers and others who do not qualify for regular state benefits. 

Nonfarm payrolls, i.e. the number of new jobs added to the US economy, continue to stall, suggesting any employment growth is still a long way off coming. 

Joblessness won’t be good for the economy. Less money in workers hands points towards less spending power, which means retail sales are likely to drop (see below for more detail), and less money will be swirling around the US economy as a whole, potentially stunting growth. 

Biden’s $1.9 trillion stimulus package contains numerous provisions to help small businesses pay and keep their workers. Will it be enough? It seems like its on the fast track to pass through the House, but its full effects won’t be seen in the short term, or until cash actually enters business’ hands. 

US retail sales – another bad showing? 

We get to see the ongoing impact Covid-19 has on the US’ retail sector this week with a fresh batch of retail sales data released. 

December’s receipts were down 0.7%, according to Commerce Department figures, as reported by Bloomberg, which throws a dampener on MasterCard’s findings that Thanksgiving/Christmas sales actually beat expectations.  

Traditionally, the Holidays are the busiest shopping seasons for US consumers. Throw in Black Friday and Cyber Monday in the same period, then online sales should at least have shown solid performance.  

Amazon in its latest earnings call reported Cyber Monday 2020 was its best ever shopping day, with sales on that 24-hour period clocking in at $9.2bn. Prime Day sales also broke expectation, accruing $10.4bn in sales. 

So, if Amazon enjoyed a bumper period, why are retail sales down across the board? Lockdown, of course, is playing havoc on physical stores, but job losses are likely lowering the overall buying power of the US public. Essentially, retail will probably keep taking body blows as long as the pandemic continues to rage. 

Bloomberg reports it was losses at department stores, restaurants, and other non-Amazon online outlets causing the drop off.  

Will stimulus help? Part of President Biden’s latest round of stimulus are $1,400 individual cheques, which may lend Americans to spend a bit more on non-essentials. 

But we won’t know how things really sit until January’s numbers are reported next Wednesday. 

FOMC releases latest meeting minutes  

The Federal Open Markets Committee met for the first time in 2021 a couple of weeks ago, and the meeting notes are released for public consumption in the week ahead. 

We know from reports that much hasn’t changed from its December meeting: a long-term bullish outlook, driven by vaccines and stimulus, but short-term risk. While stimulus and vaccines are very much driving hopes for the future, in the present, issues around vaccine delivery, plus the erosion of the labour market, mean the Fed is likely to take its foot off the gas when it comes to major shifts in monetary policy. 

Inflation as been discussed, amidst committee discussion on tapering bond purchases, but there seems no indicator that rates will be rising any time soon – even if unemployment drops to numbers that would conventionally start price alarm bells ringing. 

Janet Yellen is one of the new faces joining the FOMC, taking up the role of Treasury Secretary. Neil Wilson, our Chief Markets Analyst, sees scope for a more cohesive fiscal-monetary structural dynamic at work with Yellen’s appointment. Is a shift towards Modern Monetary Theory on its way? 

PMIs – what’s the outlook? 

PMI data in the UK, US and Europe is released next week too, giving some more economic health indicators for these key geographies.  

For Europe, it’s not particularly good. IHS Markit’s PMI fell from December’s 49.1 points to 47.5 points in January, peeling away from the 50 points that indicate ongoing growth. Could a double dip recession be on its way? The difference in the EU’s chief economies, Germany and France, shows differing signals. German industry, for instance, with rising exports, is helping keep Germany on a slim growth trajectory, but France can’t say the same. 

Despite this, it’s not all rosy. January’s IHS Markit final manufacturing PMIs fell to 54.8 in January from December’s 55.2, although that was a touch above the initial 54.7 “flash” estimate. 

“Euro zone manufacturing output continued to expand at a solid pace at the start of 2021, though growth has weakened to the lowest since the recovery began as new lockdown measures and supply shortages pose further challenges to producers across the region,” said Chris Williamson, IHS Markit Chief Business Economist, told Reuters. 

In the UK, the flash PMI index fell to 40.6 in January, showing the lowest reading in eight months. This is far well below the 45.5 level forecast by economists polled by Reuters and the third consecutive reading below 50. Despite vaccine rollout being one of the best in the world, the UK remains in tight lockdown, dealing with changing virus strains, and it appears this is still having a major impact on not just the nation’s physical health, but its economic health too. 

January’s manufacturing PMIs sees output surging in the US. Flash US manufacturing PMI accelerated to 59.1 in the first half January, the highest since May 2007, from 57.1 in December. Economists had previously forecast the index slipping to 56.5 in early January. Can the trend continue? 

Key economic data 

Date  Time (GMT)  Currency  Event 
Wed Feb 17  7.00am  GBP  CPI y/y 
  1.30pm  USD  Core Retail Sales m/m 
  1.30pm  USD  Retail Sales m/m 
  1.30pm  USD  Core PPI m/m 
  1.30pm  USD  PPI m/m 
  7.00pm  USD  FOMC Meeting Minutes 
       
Thu Feb 18  1.30pm  USD  Unemployment claims 
  3.30pm  USD  Natural Gas Inventories 
  4.00pm  USD  Crude Oil Inventories 
       
Fri Feb 19  7.00am  GBP  Retail Sales m/m 
  8.15am  EUR  French Flash Services PMI 
  8.15am  EUR  French Flash Manufacturing PMI 
  8.30am  EUR  German Flash Manufacturing PMI 
  8.30am  EUR  German Flash Services PMI 
  9.00am  EUR  Flash Manufacturing PMI 
  9.00am  EUR  Flash Services PMI 
  9.30am  GBP  Flash Manufacturing PMI 
  9.30am  GBP  Flash Services PMI 
  1.30pm  CAD  Core Retail Sales m/m 
  1.30pm  CAD  Retail Sales m/m 
  2.45pm  USD  Flash Manufacturing PMI 
  2.45pm  USD  Flash Services PMI 

 

Earnings data 

Data  Company  Event 
Mon 15 Feb  BHP Billiton  Q2 2021 Earnings 
  Michelin  Q4 2020 Earnings 
  Liberty Global  Q4 2020 Earnings 
     
Tue 16 Feb  CVS Health  Q4 2020 Earnings 
  Palantir   Q4 2020 Earnings 
  AIG  Q4 2020 Earnings 
  Yandex  Q4 2020 Earnings 
  Bridgestone  Q4 2020 Earnings 
  Poste Italiane  Q4 2020 Earnings 
     
Wed 17 Feb  Shopify  Q4 2020 Earnings 
  Rio Tinto  Q4 2020 Earnings 
  BAT  Q4 2020 Earnings 
  Novatek  Q4 2020 Earnings 
  Hilton  Q4 2020 Earnings 
  Schindler  Q4 2020 Earnings 
  Garmin  Q4 2020 Earnings 
     
     
Thu 18 Feb  Walmart  Q4 2021 Earnings 
  Airbus  Q4 2020 Earnings 
  Daimler   Q4 2020 Earnings 
  Barrick Gold  Q4 2020 Earnings 
  EDF  Q4 2020 Earnings 
  Carrefour  Q4 2020 Earnings 
     
Fri 19 Feb  Hermés  Q4 2020 Earnings 
  Danone  Q4 2020 Earnings 
  RBS  Q4 2020 Earnings 
  Renault  Q4 2020 Earnings 

 

 

Week Ahead: BoE & FOMC meets plus US retail sales

Week Ahead

The week ahead holds meetings for the FOMC in the US and the Bank of England, setting the tone for financial policy to come as the pandemic continues. Europe also releases a new wave of flash PMIs, while we also forecast what could happen in the US retail sector post-Black Friday. 

FOMC meets 

For the final time in 2020, the US Federal Reserve’s Federal Open Market Committee (FOMC) meets to decide the direction of US monetary policy. 

The case for further Fed-sanctioned stimulus is being strengthened by disappointing Nonfarm Payrolls. About 245,000 new jobs were added to the US economy in November: great for non-pandemic times, but less than half of those predicted. 

Will the US economy start to struggle in December? It’s possible. 

Commentators have forecast two financial aspects the Fed could be considering in its next round of meetings: adjustments to its current asset buying programme, and a rejigging of its emergency lending programmes. 

First, assets. The Fed is currently hoovering up $80bn worth of Treasury securities and $40bn mortgage-backed securities every month. Yields at the short end of the Treasury curve remain well anchored near all-time lows. 

November’s meeting minutes suggest many FOMC members are more inclined to extend the maturity composition of its assets rather than increase the pace of purchases. 

With that in mind, it’s likely that the FOMC won’t announce any actual changes to its asset purchasing programme in December, but probably hint at alterations due in the coming months. 

Secondly, scaling back lending programmes may be on the agenda. Some $454 billion was approved for lending under the Trump White House’s CARES Act, but uptake was only around $6n. Essentially, the US government might want its money back. 

Bank of England meets too 

The BoE is gearing up for its final round of 2020 meetings too; meetings that could be coloured by the progress, or lack thereof, on a Brexit deal. 

Despite PM Johnson crashing into Brussels last week like Indiana Jones with a big whip in one hand and a skinny latte in the other to try and break the deadlock, “significant divergences” still remain between the UK and Europe. 

BoE governor Andrew Bailey has a lot on his plate as is, without the very tangible threat of a no-deal Brexit looming like an economic mushroom cloud. The Covid-19 pandemic continues, even with the UK starting the world’s first mass vaccination regime to combat the virus. 

What’s more, the UK’s GDP growth has taken a snail-like character after the cheetah-esque performance earlier in the year prior to lockdown 2.0, crawling up just 0.4% in the last quarter. 

The main hues being used to paint the UK’s economic portrait are slowing GDP growth, a no-deal Brexit and the continuing effects of the pandemic.  

All of this will no doubt play into the BoE’s talks and December outcomes.  

According to remarks he made to a Westminster committee in November 2020, Governor Bailey thinks of the those three, the biggest issue will be falling out of the EU with no deal. 

The long-term effects… I think would be larger than the long-term effects of Covid,” he said. 

“It is in the best interests of both sides…for there to be a trade agreement and for that trade agreement to have a strong element of goodwill around it in terms of how it is implemented.” 

US retail sales 

The latest batch of US retail sales data is released this coming week. 

Will they pick up? The previous couple of month’s performance has been less than stellar. October saw a 0.3% rise, hitting $553.33bn. September’s figures have been revised down by three tenths of a percentage to 1.6% growth – which is still strong, but perhaps not as strong as US retailers would hope. 

But there is a Black Friday-shaped ace up US retail’s extensive sleeves. American consumers spent $9bn online during the annual shopping frenzy, a y-o-y increase 21.6%. 

As ever in this crazy year, there is a twist in the tale. In-store footfall was down over half, according to Sensormatic Solutions, so while the see saw is tipped towards online shoppers, actual, physical shopping will likely be massively lower. 

Cyber Monday, though, was the single largest online shopping day on record in the US. Sales on the Black Friday follow up weighed in at $10.8bn, up 15% against 2019’s figures. 

Will this be enough to counter the slow growth and put US retail sales back on a positive footing? 

European PMIs 

It’s time for another round of flash European PMIs, and if the previous round is any indicator of current performance, we’re in for an expected second EU economic downturn. 

The return to lockdown has not been kind to Europe financially.  

As of November, Eurozone PMI had fallen from 50 to 45.1. Services continue to take the largest hit overall, according to ING, with Service PMI falling from 46.9 to 41.3 in November. Unemployment in the industry continues to rise and will likely do so until lockdowns are lifted. Let’s hope vaccines can start a European rollout soon. 

Still, manufacturing signals are stronger as a buoyant Germany helps keep things afloat. ING says the manufacturing PMI merely indicated a slowing of output growth, but not contraction.  

German export sales continued to the boost nation’s manufacturing growth in November in Germany, suggesting that the milder second wave outside of the eurozone is helping exporters to recover ground. 

Let’s wait and see what December’s flash PMIs bring. 

Brexit 

At the time of writing, we’re still yet to hear a decision on Brexit. A tete a tiny tete between Johnson and Ursula von der Leyen couldn’t shift the deadlock. As it stands, we’re still waiting for an end to this long, trying saga.  

Webinars to watch 

Trading pro Mark Leigh is once again holding a suite of educational trading-focussed webinars this week to help you get further insights into the nitty gritty of trading. Highlights include: 

Mark Leigh’s Trader Clinic 

Monday 14th December 2020 – 2.00pm GMT 

See how a professional uses the ups and downs of trading to hone their strategy and improve their returns with our Trader Clinic. Join Mark Leigh as he demonstrates the procedure he uses to evaluate his winning and losing trades and build a better strategy. 

Sign up 

Ten Trading Rules for Every Level of Trader 

Tuesday 15th December – 6.00pm GMT 

Trading is not an exact science, the markets are live and often unpredictable, that is why you need a set of rules as a basis for making educated and calculated trading decisions. 

Sign up 

Where is the Rand Going in 2021? 

Thursday 17th December  5.00pm GMT 

In light of Fitch’s recent downgrade of South Africa, there are increasingly question marks over whether the rand can hold current levels against the US dollar. Fitch’s downgrade reflected what is sees as high and rising government debt, exacerbated by the economic shock triggered by the COVID-19 pandemic. Does this mean a weaker currency next year? 

Sign up 

Major economic data 

Date  Time (GMT)  Currency  Event 
Mon Dec 14th  Ongoing  CNH  Foreign Direct Investment ytd/y 
       
  10.00am  EUR  Industrial Production m/m 
       
Tue Dec 15th  12.30am   AUD  Monetary Policy Meeting Minutes 
       
  2.00am  CNH  Retail Sales y/y 
       
  7.00am  GBP  Unemployment Rate 
       
  2.15pm  USD  Industrial Production m/m 
       
  10.00pm  AUD  Flash Manufacturing PMI 
       
  10.00pm  AUD  Flash Services PMI 
       
Wed Dec 16th  12.30am  JPY  Flash Manufacturing PMI 
       
  7.00am  GBP  CPI y/y 
       
  8.15am  EUR  French Flash Services PMI 
       
  8.15am  EUR  French Flash Manufacturing PMI 
       
  8.30am  EUR  German Flash Manufacturing PMI 
       
  8.30am  EUR  German Flash Services PMI 
       
  9.00am  EUR  Flash Manufacturing PMI 
       
  9.00am  EUR  Flash Services PMI 
       
  9.30am  GBP  Flash Manufacturing PMI 
       
  9.30am  GBP  Flash Services PMI 
       
  1.30pm  CAD  CPI m/m 
       
  1.30pm  USD  Core Retail Sales m/m 
       
  1.30pm  USD  Retail Sales m/m 
       
  2.45pm  USD  Flash Manufacturing PMI 
       
  2.45pm  USD  Flash Services PMI 
       
  3.30pm  USD  US Crude Oil Inventories 
       
  7.00pm  USD  FOMC Economic Projections 
       
  7.00pm  USD  FOMC Statement 
       
  7.30pm  USD  FOMC Press Conference 
       
Thu Dec 17th  12.30am  AUD  Employment Change 
       
  12.30am  AUD  Unemployment Change 
       
  9.00am  CHF  SNB Press Conference 
       
  12.00pm  GBP  MPC Official Bank Rate Votes 
       
  12.00pm  GBP  Monetary Policy Summary 
       
  12.00pm  GBP  Official Bank Rate 
       
  3.30pm  USD  US Natural Gas Inventories 
       
Fri Dec 18th  Tentative  JPY  Monetary Policy Statement 
       
  7.00am  GBP  Retail Sales m/m 
       
  1.30pm  CAD  Core Retail Sales m/m 
       
  1.30pm  CAD  Retail Sales m/m 

 

Key earnings data 

Date  Company  Event 
Tue Dec 15th  Nordson  Q4 2020 Earnings 
  Inditex  Q3 2020 Earnings 
     
Wed Dec 16th  Lennar  Q4 2020 Earnings 
     
Thu Dec 17th  Accenture  Q1 2021 Earnings 
  FedEx  Q2 2021 Earnings 
  Cintas  Q2 2021 Earnings 
  General Mills  Q2 2021 Earnings 
     
Fri Dec 18th  Nike  Q2 2021 Earnings 
  Carnival  Q4 2021 Earnings 
  Darden Restaurants  Q2 2021 Earnings 
  Oracle Japan  Q2 2021 Earnings 

CySEC (EU)

  • Client’s funds are kept in segregated bank accounts
  • FSCS Investor Compensation up to EUR20,000
  • 1,000,000 insurance cover** 
  • Negative Balance Protection

Products

  • CFD
  • Share Dealing
  • Strategy Builder

Markets.com, operated by Safecap Investments Limited (“Safecap”) Regulated by CySEC under licence no. 092/08 and FSCA under licence no. 43906.

FSC (GLOBAL)

  • Clients’ funds kept in segregated bank accounts
  • Electronic Verification
  • Negative Balance Protection
  • $1,000,000 insurance cover** 

Products

  • CFD
  • Strategy Builder

Markets.com, operated by Finalto (BVI) Ltd by the BVI Financial Services Commission (‘FSC’) under licence no. SIBA/L/14/1067.

FCA (UK)

  • Client’s funds are kept in segregated bank accounts
  • FSCS Investor Compensation up to GBP85,000
    *depending on criteria and eligibility
  • £1,000,000 insurance cover** 
  • Negative Balance Protection

Products

  • CFD
  • Spread Bets
  • Strategy Builder

Markets.com operated by Finalto Trading Ltd. Regulated by the Financial Conduct Authority (“FCA”) under licence number 607305.

ASIC (AU)

  • Clients’ funds kept in segregated bank accounts
  • Electronic Verification
  • Negative Balance Protection
  • $1,000,000 insurance cover**

Products

  • CFD

Markets.com, operated by Finalto (Australia) Pty Ltd Holds Australian Financial Services Licence no. 424008 and is regulated in the provision of financial services by the Australian Securities and Investments Commission (“ASIC”).

Selecting one of these regulators will display the corresponding information across the entire website. If you would like to display information for a different regulator, please select it. For more information click here.

**Terms & conditions apply. Click here to read full policy.

Marketsi
An individual approach to investing.

Whether you’re investing for the long-term, medium-term or even short-term, Marketsi puts you in control. You can take a traditional approach or be creative with our innovative Investment Strategy Builder tool, our industry-leading platform and personalised, VIP service will help you make the most of the global markets without the need for intermediaries.

La gestión de acciones del grupo Markets se ofrece en exclusiva a través de Safecap Investments Limited, regulada por la Comisión de Bolsa y Valores de Chipre (CySEC) con número de licencia 092/08. Le estamos redirigiendo al sitio web de Safecap.

Redirigir

Are you lost?

We’ve noticed you’re on the site. As you are connecting from a location in the you should therefore consider re-entering , which is subject to the product intervention measures. Whilst you’re free to browse here on your own exclusive initiative, viewing the site for your country will display the corresponding regulatory information and relevant protections of the company you choose. Would you like to be redirected to ?