Tapas Strickland | Markets Research
Past Week
- Locally, it was a very quiet week with only remarks by RBA Deputy Governor Hauser of any note. Hauser implicitly endorsed the market reaction to the stronger than expected labour market figures the week before
- Offshore it was also relatively quiet given central bankers and finance ministers were in Washington for the IMF/WB meetings. The BoC though did meet and cut rates by 50bps as largely priced by markets
- The backup in US yields in the absence of dataflow has dominated market chatter. The US 10yr yield rose 12.1bps to 4.21%. AU yields have moved by a similar magnitude, meaning the AU-US 10yr spread has been little changed
Week ahead
- Australia’s Q3 CPI (Wednesday) dominates the week. Given government subsidies, it will be important to look at core measures. For Trimmed Mean we expect a 0.8% q/q outcome, which is what the RBA had pencilled in
- In the event of a downward surprise on trimmed mean to 0.7% q/q, we think given the government subsidies the RBA would still look for further confirmation of trends in Q4 CPI before contemplating a cut in February
- Offshore it is extremely busy. The key events are Q3 GDP for the US and EZ (Wednesday), China PMIs, Eurozone CPI, US ECI (Thursday), and US Payrolls and ISM Manufacturing (Friday). The BoJ also meets, election though dominates:
- For US Q3 GDP (Wednesday)consensus sits at 3.0% annualised, well above the 1.8% trend growth estimate by FOMC officials. Payrolls are likely to be buffeted by hurricane impacts making it hard to read
- The US ECI (Thursday) will be worth focusing on to see whether wages growth is in line with what would be considered at target inflation. And of course PCE inflation figures are published alongside Q3 GDP
- In China the PMIs for October (Thursday) will be closely watched for any stimulus impacts on sentiment. Also we will be watching for the possibility of stimulus announcements with the NPC meeting
- In NZ it is relatively quiet with the most important pieces being the ANZ Business Survey (Thursday) and Employment Indicators (Tuesday).
- Finally in Japan, the BoJ (Thursday) is expected to be a dead meeting, with markets instead looking at the implications of the weekend elections
- There is also a smorgasbord of large tech names reporting, including Alphabet (Tuesday), Meta and Microsoft (Wednesday), and Amazon and Apple (Thursday)
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All prices and analysis at 25 October 2024. This information has been prepared by National Australia Bank Limited ABN 12 004 044 937 AFSL 230686 ("NAB"). The content is distributed by WealthHub Securities Limited (WSL) (ABN 83 089 718 249)(AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937)(AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer. This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice. Past performance is not a reliable indicator of future performance. Any comments, suggestions or views presented do not reflect the views of WSL and/or NAB. Subject to any terms implied by law and which cannot be excluded, neither WSL nor NAB shall be liable for any errors, omissions, defects or misrepresentations in the information or general advice including any third party sourced data (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the general advice or information. If any law prohibits the exclusion of such liability, WSL and NAB limit its liability to the re-supply of the information, provided that such limitation is permitted by law and is fair and reasonable. For more information, please click here.