We wish all of those affected by Hurricane Sandy a swift recovery. As a result of the damage and aftermath, the timing of some US economic reports may be delayed. However, a rash of European economic news, US elections on Tuesday, a Chinese leadership transition and several central bank policy announcements likely dominate planned events next week.
G20 finance ministers and central bank governors meet in Mexico City for a two-day summit
As we’ve often said, these summits are high in rhetoric but rarely, if ever, produce meaningful policy changes.
Reserve Bank of Australia (RBA) November board meeting and announcement
Australian inflation rose more than expected in September; however, expectations are for the RBA to cut target rates modestly at the upcoming meeting. The Australian dollar continues to strengthen relative to other major currencies, and it’s likely the RBA continues the trend of global central banks’ extremely accommodative monetary policy.
US and British services indexes
The October services indexes for these two countries don’t have much historical data—the US index only started in 1998—but still serve as useful gauges of overall service sector trends.
US election day
By day’s end, we should know far more about the balance of power in Washington over the next four years. Regardless of who takes the White House and how majorities shift in the House and Senate, gridlock seems the most likely outcome. And either way, stocks should do fine through year end.
October French, German and Eurozone PMI composites
These manufacturing indexes are frequently watched as indicators of broad economic conditions. There continue to be pockets of weakness with some significant worsening in several readings. However, there are also pockets of resilience.
Eurozone October PPI
British September industrial production
German September manufacturing orders
Eurozone September retail sales
German September industrial production
Japanese September machine orders
US September consumer credit
German Chancellor Angela Merkel addresses the EU Parliament in Brussels
The German Chancellor’s set to outline her vision for the EU’s future, but don’t expect any sweeping solutions for the eurozone’s ongoing problems—the slow-go, incremental approach likely continues.
China’s Communist Party opens its 18th National Party Congress, marking the party’s once-a-decade power transition
Following what appeared to be an internal power struggle early in the year, China’s political transition remains on track. Party leaders have quelled those who threatened to disrupt the planned handover of power from President Hu Jintao and Premier Wen Jiabao to Xi Jinping and Li Keqiang, respectively, who share Hu and Wen’s moderate leanings. Looking forward to the post-transition period, leaders will still have every incentive to ensure the economy accelerates. With stimulus now seemingly starting to hit the broader economy, growth will likely receive a well-timed boost.
Bank of England and European Central Bank policy announcements
September US international trade balance
Weekly US jobless claims
October German CPI
September Italian and French industrial production
October US import and export prices
November US consumer sentiment
EU Finance Ministers meet to finalize the 2013 EU budget
Although finance ministers will meet to debate the budget, it still needs to be distributed to and approved by the parliaments of all 27 member countries. We expect there to be significant rhetoric and revision between this draft and a final, EU-approved version.
Japanese Q3 preliminary GDP and PPI
Given ongoing political infighting and a lack of will to enact necessary reforms to right the country’s economy, we expect Japanese economic figures to reflect ongoing malaise.