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What to Watch - Week of 7 October 2024

It will be a quiet week on the data docket here at home, though things are busy offshore. The RBNZ meets, with a 50bps cut expected, China returns from its Golden Week, US CPI data hits the wires (the last reading before the Presidential election and the FOMC’s November meeting) and earnings season unofficially kicks off state-side with JP Morgan and Wells Fargo reporting on Friday.
NAB Markets Research
08 October 2024
Created by potrace 1.15, written by Peter Selinger 2001-2017 3 min read

Taylor Nugent | Markets Research 

Past Week

  • NAB Economics moved forward our RBA view, now expecting a first cut in February (previously May)
  • Retail sales picked up in August in a positive sign for the consumer, but we still see the risk to the downside of the RBA’s near-term growth forecasts
  • Offshore, markets were digesting competing themes from China stimulus, ongoing easy policy settings in Japan, risk of escalating conflict in the middle east, easing inflation concerns in Europe, and resilience in US data.
  • All of that ahead of US Payrolls tonight, but the net so far is a broadly stronger USD supported by higher relative US yields, higher oil prices, and equities that are generally lower on the week outside of China.

Week ahead

  • Another quiet week in Australia which kicks off with a Public Holiday in NSW, QLD, SA and ACT. Thin liquidity is likely, and while OTC markets are closed, futures and the ASX are open. Tuesday is the bumper day for data, which includes the NAB Business Survey, Westpac Consumer Sentiment, and RBA Minutes. Plenty of RBA speak, including Deputy Governor Hauser.
  • Offshore, four key data points: (1) RBNZ meets and where our BNZ cousins expect a 50bp cut (markets are around 75% priced for this); (2) China returns from its Golden Week; (3) US CPI which is also the last CPI print before the US election and the FOMC meeting in November; and (3) US earnings season kicks off with JP Morgan and Wells Fargo report on Friday.
  • For the RBNZ (Wednesday), our BNZ cousins think it is likely to be a line ball call between 25bp or 50bp cut. BNZ recently shifted their call to a 50bp cut following the strong disinflationary message from the recent Quarterly Survey of Business Opinion (QSBO). The consensus has also moved to a 50bp cut and markets have 43.5bps priced – or a 74% chance of a 50bp cut
  • The US sees CPI for September (Thursday) and PPI (Friday) which will provide a good guide to the Fed’s preferred PCE measure. Note the CPI is the last inflation report before the November election (5 November) and the FOMC meeting (7 November). Other data out include the University of Michigan Consumer Sentiment (Friday), as well as plenty of Fed speak which will give an update to various views after tonight’s Payrolls report.
  • Quiet elsewhere with little data of note coming out in Europe or the UK. Japan (and the BoJ) takes a backseat until the elections are out of way which are slated for the end of October.

View the full report here

Also in the What to Watch

 

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