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Flash October PMIs & Japan's lower house election take centre stage

21 October 2024

Emily Nicol
  • The flash October PMIs from the major economies (Thursday) will provide an update on economic conditions at the start of Q4; while the surveys from the US, Japan and UK will likely point to ongoing expansion, the euro area composite PMI is expected to imply ongoing stagnation amid persisting contraction in Germany
  • In Japan, the main focus will be the Lower House election on Sunday with polls suggesting that the outcome could be the closest since 2009 when the LDP lost power to the DPJ. Indeed, with polls implying a loss of seats for both the LDP and its junior partner Komeito, the ruling coalition might even fail to garner a simple majority
  • Tokyo CPI figures (Friday) are expected to show that headline inflation fell 0.3ppt to a six-month low of 1.8%Y/Y due to lower energy prices. The BoJ’s preferred core measure, excluding fresh food and energy, is expected to move sideways at 1.6%Y/Y for a third consecutive month

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ECB poised for second consecutive cut, while September CPI lands

14 October 2024

Emily Nicol
  • The ECB’s seems bound to cut rates on Thursday for a second successive meeting and the third time since June, while the Governing Council’s forward guidance is likely to repeat that a data-dependent and meeting-by-meeting approach will be maintained
  • In the UK, highlights include September CPI (Wednesday) and August labour market figures (tomorrow); we expect headline inflation to fall below to 1.8%Y/Y, the lowest rate since April 2021 due in part to lower energy prices, but services inflation is also likely to ease allowing core inflation to drop; the unemployment rate is forecast to remain steady at 4.1%, but total pay growth is expected to drop to its softest since November 2020
  • In Japan, September CPI figures (Friday) are expected to show that headline CPI fell back around ½ppt to 2.5%Y/Y due to the extension of government utility subsidies, but the BoJ’s preferred core measure (excluding fresh foods and energy) is expected to remain steady bang in line with its 2% target; September goods trade and August tertiary activity figures (Thursday) are also due

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US payrolls, euro area inflation estimates & BoJ Tankan in focus

30 September 2024

Chris Scicluna; Emily Nicol
  • Flash estimates of euro area HICP rate look bound to fall below the ECB’s 2% target for the first time since mid-2021 
  • In the US, the September non-farm payrolls report, ISM surveys and August JOLTs data are due, while Fed Chair Powell is due to give a speech on the economic outlook later today
  • In Japan, despite a disappointing IP release in August, the BoJ’s Tankan survey is likely to suggest that conditions in the factory and services sector were little changed from Q2 to signal ongoing expansion

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Flash PMIs, inflation and LDP leadership election the highlights this week

23 September 2024

Chris Scicluna; Emily Nicol
  • The flash September PMIs from the major economies will provide an update on economic conditions at the end of Q3 - while the surveys from the US and Japan will likely point to ongoing expansion at the end of Q3, the euro area composite PMI reported a notable deterioration and signalled renewed contraction
  • The US PCE deflator, flash estimates of French and Spanish inflation and Tokyo CPI figures are due Friday
  • In Japan, the main focus will be the LDP leadership election result on Friday. With nine candidates nominated, the outcome is difficult to predict, but polls put former Environment Minister Shinjiro Koizumi as the marginal favourite among LDP lawmakers and supporters to become Japan’s next Prime Minister 

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Fed set to cut rates for first time this cycle, but BoE & BoJ to stand pat

16 September 2024

Chris Scicluna; Emily Nicol
  • In a busy week for monetary policy decisions, the Fed seems bound to deliver the first rate cut this cycle, although the magnitude – 25bps or 50bps – is too close to call with certainty 
  • The BoE is likely to leave Bank Rate on hold, but the policy statement could well signal that a further cut will come at the following meeting in November and we do not rule out a cut this week if UK inflation data surprise significantly to the downside
  • The BoJ’s policy announcement is widely expected to leave the main interest rate unchanged at 0.25%, but Ueda might well leave the door open to a further cut this year

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