It will be a busy week in the US as investors will be waiting for the FOMC minutes release for further clarification on the next monetary policy steps from the Fed. The Fed last raised its target rate for the fed funds rate by 25bps to 2%-2.25% on September 26th as widely expected. In the weeks following the decision, remarks from Fed Chair Powell and strong economic data for the US (including a near 49-year low unemployment rate, upward revisions to the jobs report and a record high ISM non manufacturing PMI) prompted fears that the Fed would tighten further than anticipated, leading to a global sell-off in bonds and stocks, with the yield on the US 10-year Treasury note reaching 7-year highs and Wall Street recording its worst day in eight months. Yet, later last week, inflation for September came in below market expectations, slightly alleviating investors nerves as Treasury yields retreated.
Other important releases for the US include housing data (building permits, housing starts and existing home sales), with markets expecting a mixed result; retail sales which are seen rising slightly faster as consumer spending remains strong; industrial production, expected to rise slightly less than in the previous month; NAHB housing market index; NY Empire State Manufacturing Index; Philadelphia Fed Manufacturing Index; JOLTS job openings; and business inventories.
The third-quarter earnings season started last Friday with reports from big banks and will continue next week. Analysts anticipate a near 20 percent year-on-year rise in earnings for the S&P 500 amid strong economic prospects in the US, a cut in corporate tax and higher oil prices.
Several Fed officials are also due to speak at respective events.
China will publish GDP figures for Q3, with markets anticipating a slowdown to a 6.6 percent growth from 6.7 percent in the previous quarter as the industrial sector possibly underperformed due to trade conflicts with the US. That would be the first slowdown in a year although growth would remain above the government's target of 6.5 percent. Other data include: consumer and producer inflation, retail sales, industrial production and fixed asset investment.
Japan will publish inflation and trade data, with both exports and imports seen slowing; India WPI inflation; and Australia employment figures and RBA meeting minutes will also be in the spotlight.
It will be an important week for Brexit. The European Council will meet to review the latest developments in the Brexit negotiations and the Summit is seen as the last chance to reach a proper deal although some issues such as the Irish border still need to be defined. On the economic data front for the UK: unemployment and earnings growth are seen steady; inflation rate is expected to slow down; and retail sales to contract.
Other important data in Europe include: Euro Area final inflation figures and construction output; and Germany ZEW sentiment. Italy remains a concern for investors after the government decided to increase public spending. Italy's 2019 budget is expected to be approved by the cabinet on Monday.