Key event risks – Westpac

Analysts at Westpac offered their outlook for key events coming up.

Key Quotes:

“Oct Australia home price data from CoreLogic (10am Syd) should not surprise because updates are published within the month. Westpac expects -0.5%mth on the national number, -4.5%yr. Sydney is likely to be around -7%yr.

Australia should record a ninth consecutive month of trade surpluses in the September report (11:30am Syd/8:30am Sing/HK). August produced a A$1.6bn surplus and Westpac looks for $1.7bn in Sep, with exports +1%, imports +0.8%. Export values should be aided by a weaker A$, higher coking coal and iron ore prices but held back by sluggish coal, LNG and iron ore shipment volumes.

Asia’s calendar includes Oct CPI data in South Korea, Indonesia and Thailand, plus the private sector survey of China manufacturing sentiment for Oct (conducted by Markit, sponsored by Caixin, 12:45pm Syd/9:45am local). The Sep reading was already weak, at 50.0, so there could be a kneejerk response if it drops below 50 for the first time since May 2017.

The Bank of England is expected to be on hold at 0.75% for many months so there is no tension around the interest rate decision, with a 9-0 MPC vote seemingly assured. There will be plenty of commentary and forecasts to be absorbed however, including the quarterly Inflation Report. How valuable such forecasts are given the deep uncertainty over Brexit is open to debate.

The US data calendar holds some interest ahead of Friday’s main event: the October employment report. Sep construction spending data could produce revisions to Q3 GDP, while Oct manufacturing sentiment from ISM is expected to indicate ongoing strength, around 59 (compared to e.g. China’s 50.2 reported yesterday). The employment sub-index will be watched; Sep was 58.8.”