What mattered last week and a preview of the week ahead 18th October

What mattered last week:

  • A sixth straight week of gains and new record highs for the S&P 500 on continued optimism surrounding the U.S. – China trade deal.
  • Also supported by mixed economic data including lower than expected core U.S. CPI and Chinese activity data that allowed bond yields to retrace from recent highs.
  • Better news in Europe as Eurozone Q3 GDP was revised higher to +1.2%, from +1.1% YoY.
  • In New Zealand, the RBNZ surprised the market keeping interest rates on hold at 1.00%.
  • In Australia, weak wages and jobs data weighed on the AUDUSD which closed near .6820.
  • Increased expectations of another rate cut in Australia helped the ASX200 close over 1% higher, near 6800.

For the week ahead, the key events are:

Australia: RBA meeting minutes (Tuesday).

New Zealand: NZ Services PSI (Monday), PPI (Tuesday), Global dairy auction (Wednesday).

China: Loan prime rate (Wednesday).

Japan: Balance of trade (Wednesday), CPI (Friday).

U.S.: NAHB housing market index (Tuesday), housing starts, building permits (Wednesday), FOMC minutes (Thursday), existing home sales, Markit flash PMI’s.

  • Markit PMI’s (Fri): The market is expecting to see a modest improvement in the composite PMI to 51.9 this month from 50.9 in October.

Canada: Manufacturing sales (Wednesday), CPI (Thursday), retail sales (Friday).

  • CPI (Wed): Core CPI is expected to rise 0.3% m/m in October, keeping the YoY rate steady at 1.9%.

Euro Area: EA and German ZEW economic survey (Tuesday), EA industrial production (Wednesday), EA and German GDP Q3 (Thursday), balance of trade (Friday).

UK: GDP, industrial production (Monday), employment (Tuesday), CPI and PPI (Wednesday), retail sales (Thursday).


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