Ostwald, Marc
08:47 (8 minutes ago)
to Marc
- Modest run of data has UK spending and Japan services surveys and German
Trade data to digest ahead of US NFIB Small Business Optimism; IMF /
World Bank meeting begin; smattering of central bank speakers; auctions
in Germany, Netherlands and USA
- IMF forecast update: largely unsurprising and well flagged; downward
revision to US forecasts makes little sense
- US NFIB Small Business Optimism: marginal dip from 44-year high expected,
labour components underline tight labour market, strength of economy
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** EVENTS PREVIEW **
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Once again the day's data schedule looks unlikely to 'trouble the scorers' with the UK BRC Retail Sales (sluggish), Japan Economy Watchers (services) survey and German Trade (Import fall follows July jump, but implies softer Q3 GDP) to digest, while the US looks to NFIB Small Business Optimism. The events schedule is busier thanks to the start of the annual IMF/World Bank meetings, which has also seen the IMF update its world economic outlook, with a number of central bank speakers, and a relatively busy run of govt auctions seeing Germany sell 8-yr inflation-linked Bunds, a Dutch 30-yr DSL and the US gets this week's fund raising exercise with a full set of T-Bill Sales (1, 3, 6 & 12 month) totalling $156 Bln, (all on one day due to the Columbus Day bond market holiday yesterday). The BoE's FPC also publishes its statement with no major changes in policy expected, but the focus likely to be on the UK and indeed Eurozone financial sector 'preparedness' for all Brexit scenarios, as well as any comments on how the regulatory backdrop might change post-Brexit. In terms of the IMF's forecasts, the downward revisions had already been well flagged by Lagarde last week, and are in most cases rather unsurprising. However the downward revision for the US in 2019 to 2.5% looks to be under-clubbed, and the 2018 forecast at 2.9% may also prove to be too low. The downward revision to the Eurozone to 2.0% for 2018 and 1.9% in 2019 are very much in line with other forecasters, though it should be emphasize this would still be above the assumed current potential rate around 1.5%.
** U.S.A. - September NFIB Small Business Optimism **
- It will be recalled that August saw a new all-time (44 years) high for the NFIB survey at 108.8, with a marginal setback expected in September to 108.0. The labour components of the survey were already published last week, and saw a record net 37% of respondents reporting rising wages in the past 3 months, and an unchanged net 38% of companies with job openings that are 'hard to fill'. Notable points in the August survey, were a sharp pick-up in both plans to increase Capital Spending (net 33% vs. prior 30%) and Inventories (10% vs. prior 4%), while 'Good Time to Expand' got back to its previous high at 34%. Per se, even if there were to be a sharper setback, it would hardly signal a slowdown, unless sustained over a number of months.
from Marc Ostwald
