Analysts at Nomura offered a preview of the next key data scheduled for today from the US session.
Key Quotes:
“Industrial production: We expect a steady 0.4% m-o-m increase in industrial production in September (Consensus: 0.2%), some of which will likely be driven by strong contributions from the autos and mining sectors. Autos and auto parts output likely increased at a solid pace, based on industry forecasts. The mining sector production likely rose firmly, based on incoming EIA data on crude oil and liquid gas production. We think ex-auto manufacturing sector output increased only modestly, with downside risk related to disruptions caused by the Hurricane Florence in South Carolina and North Carolina. Carolinas’ production of textile products, food, beverage & tobacco products, furniture products and wood products accounts for substantial shares of national production. These industries were likely most exposed to the storm. That said, the negative impact from the storm on manufacturing output was likely more modest than the effects of a series of hurricanes that hit the Gulf of Mexico area in 2017 and led to prolonged disruptions to rig operation, oil refining, and petrochemical production. Looking through weather-related volatility, we expect a continued expansion in output considering strong domestic demand in the near term. However, the easing of some manufacturing survey indices in late Q3, coupled with signs of slowing external growth, raise some concern.
JOLTS job openings: Job openings remain at historical highs as strong economic growth results in sustained demand for workers. In addition, the quits rate, a measure of worker bargaining power, increased to 2.4% in July, the highest reading since April 2001. Finally, labor market turnover, the sum of hires and separations divided by two times employment has picked up, consistent with a modest acceleration in wage growth.
NAHB housing market index: We expect the NAHB housing market index to ease slightly to 66 from 67 in October (Consensus: 67). While our forecast of 66 still indicates strong optimism, the recent incoming data have indicated that worsening affordability may be affecting demand for new housing. Consumer sentiment on home buying conditions has been deteriorating for a while on rising prices. On the positives, the labor market remains strong and demographic factors still remain favorable for housing demand. In addition, the recent stabilization of softwood lumber prices may have alleviated some concern among homebuilders. “
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