In the wake of last week’s US economic data carnage, specifically the weaker US ISM prints, this week's run of economic data may take a back seat to Fed speak. The US markets are at an essential policy juncture and this week could provide a good look into the FOMC frame of mind in the context of last Friday’s mediocre and middling Non-Farm Payroll report.
Undoubtedly Fed officials are likely just as concerned with the global growth outlook at this point. As such, trade policy uncertainty is near the top of the list in this regard. Therefore, Chinese Vice Premier Liu He's scheduled visit to Washington to meet with U.S. Trade Representative Lighthizer and Treasury Secretary Mnuchin this Thursday will be monitored intently by market participants. Press reports have pointed to some form of agreement between the two parties to avoid a further escalation of trade tensions
However, for data aficionados, Tuesday's US PPI and Thursday's CPI reports will likely garner the most attention.
1-year historical PPI graph via Trading Economics
1-year historical Chicago CPI graph via Trading Economics.
Key dates and events on the ASEAN Docket
While the docket is slow, China markets reopen after Golden Week and, as usual, global investors will monitor mainland markets’ initial reaction to the weaker run of US economic data.
Chart of the Week ahead
Asia’s key bellwether USDCNH sentiment improved last week as a broadly weaker USD dollar in G-10 coupled with some light downside USDCNH in play as US-China trade talk optimism has been rising, although risk around the event has remained subdued.
Key Data Release
Trade data will be scrutinised as the key bellwether Taiwan reports on Tuesday and the Philippines on Thursday. Economists expect Taiwan's exports growth to decelerate to 1.9% in September from 2.6% in August, while the Philippines' exports are expected to fall 1.8% year over year in August vs +3.5% in July.
Malaysia’s Budget 2020 will be tabled to parliament on October 11 where investors will be keenly watching to gauge the degree the government will loosen their fiscal prudence belt and deliver an expansionary budget.
Several critical regional industrial production (IP) data releases are due from Malaysia, India and the Philippines. Economists expect Malaysia's IP growth is likely to rise to 2% year on year in August, from 1.2% in July, while India's IP growth is thought to slow to 2.1% from 4.3% in the same period and IP growth data from the Philippines is expected to remain downbeat, declining to 8% vs 8.1% in the same period the previous year.
Singapore's retail sales will headline the local docket, where analysts expect a decline of 2% year over year in August – the same pace as July – suggesting continued weakness in consumer spending.
Expanded ASEAN Calendar
Read more market views from Team AxiTrader: https://www.axitrader.com/int/market-news-blog/.
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