This week promises a flurry of pivotal economic events on the financial horizon. Following upbeat reports from JPMorgan Chase and Wells Fargo, the market is eagerly anticipating results from major players like Netflix and Tesla. In addition, investors will be focusing on publications such as US Retail Sales, Building Permits and Housing Starts, as well as UK CPI m/m and others.
Here are five economic events that could affect your portfolio this week.
🇺🇸 United States Retail Sales m/m
The US Census Bureau will release September's retail sales data on Tuesday, October 17, at 15:30 GMT+3. Retail sales is a measure of the total value of goods and services sold at the retail level in the United States.
Economists expect retail sales to have remained flat in September, following a revised gain of 0.6% in August. This would be the first month of no growth in retail sales since January 2023.
A flat retail sales report would suggest that consumers are becoming more cautious with their spending amid high inflation and rising interest rates.
The release of September's retail sales data could have a significant impact on the EUR/USD currency pair. If retail sales come in weaker than expected, it could weigh on the US dollar and send the EUR/USD higher. Conversely, if retail sales come in stronger than expected, it could boost the US dollar and send the EUR/USD lower.
🇺🇸 September’s Industrial Production
The Federal Reserve will release September's industrial production data on Tuesday, October 17. It is a leading indicator of economic growth, as it can provide clues about the strength of consumer demand and the health of the manufacturing sector.
Economists expect industrial production to have remained flat in September, following a gain of 0.4% in August.
A flat industrial production report would suggest that the manufacturing sector is slowing down. This could be a sign of a broader slowdown in the economy, as manufacturing is a major driver of economic growth.
The release of September's industrial production data could have a significant impact on the financial markets. If industrial production comes in weaker than expected, it could weigh on stock prices and boost the US Dollar. Conversely, if industrial production comes in stronger than expected, it could boost stock prices and weaken the US Dollar.
🇺🇸 Building Permits and Housing Starts
The impending release of Building Permits and Housing Starts is highly anticipated by financial analysts and investors alike. These reports are not just a window into the health of the housing market but also reflect broader economic sentiments, given the close relationship between housing demand, economic growth, and consumer confidence.
While Housing Starts month-over-month are forecasted to bounce back with a positive 2.2% after a significant decline of -11.3% last month, Building Permits are projected to witness a slight dip, with forecasts at 1.493 M compared to the previous 1.543 M. As leading indicators, these figures will be instrumental in shaping forecasts on real estate trends and their ripple effects across various sectors.
🇬🇧 UK CPI and Core CPI (m/m)
The forthcoming release of the UK's Consumer Price Index (CPI) and Core CPI figures for September 2023 is set to offer a comprehensive glimpse into the nation's inflationary landscape. In the 12-month period leading up to September 2023, the UK's CPI showed a rise of 6.7%, marginally decelerating from August's 6.8%. When assessed monthly, September 2023 saw a 0.3% climb, marking a contrast to the steeper 0.5% uptick of September 2022.
Investors and analysts will be keenly scrutinizing these numbers to gauge the trajectory of the UK's inflationary pressures and their potential economic implications.
🇺🇸 Fed Chair Powell Speech
Federal Reserve Chair, Jerome Powell, is set to make a significant address on Thursday, 19th October, at 19:00 GMT+3. Traders and investors meticulously dissect his speeches, as they often shed light on the potential direction of US monetary policy. This particular address comes at a crucial juncture.
Following the Federal Reserve's recent decision to keep interest rates unchanged during their September 19-20 meeting, the economic and geopolitical scene has seen substantial shifts. The economy indicates robust growth, perhaps too vigorous to effectively curb inflation, while soaring bond yields risk abruptly stalling this momentum. On the global front, war has ignited in the Middle East, adding to the uncertainty. To compound matters, half of the US Congress is grappling with leadership voids, with the shadow of an impending government shutdown looming large. Amid this maelstrom of events, Powell's insights are keenly awaited to provide clarity and direction.
That's it for this week! 👋
