Coffee break

The Chinese New Year celebration starts. The event is a highlight in the domestic economy, with mass travels and a consumption boost, as the Covid-19 restrictions have been lifted.

US and China will release their estimate of the Q4 GDP growth rate while key countries will release PPI and CPI figures.

Both the US CPI and the real estate market index will help assess the next US Federal Reserve Bank’s move. While there is a growing strain on home affordability keeping prospective homebuyers out of the market, consumer price inflation has yet to converge towards the Fed’s expectations.

OPEC+ decided to leave its output policy unchanged. Oil production targets will remain the same as oil markets were still assessing the impact of the Chinese demand. Meanwhile G7 nations and Australia agreed to a $60/Bbbl price cap on Russian oil. Russia may cut its oil production in response, President Vladimir Putin said.

OPEC+ decided to leave its output policy unchanged. Oil production targets will remain the same as oil markets were still assessing the impact of the Chinese demand. Meanwhile G7 nations and Australia agreed to a $60/Bbbl price cap on Russian oil. Russia may cut its oil production in response, President Vladimir Putin said.

All eyes will be on the OPEC+ output decisions and the EU's sanctions on Russian oil amidst an uncertain outlook for demand. Fluctuations in energy prices remain an important driver of consumer inflation.

As we enter the final month of the year, a rich combination of data stemming from the US labour-market, euro zone inflation and key flash GDP growth rate is expected. The data should contribute to investors’ assessment of the global economy.

Activity and sentiment-related data will be in the spotlight with the release of key countries’ flash PMI for the manufacturing and services activities as well as the EU consumer sentiment indicator.

The UK will publish new details of its budget, i.e. the country’s medium-term fiscal plan. Unlike the so-called mini-budget that sent UK financial markets into turmoil last September, it will be accompanied by an independent forecast from the Office for Budget Responsibility.

The COP27 will continue with world leaders meeting in Egypt at this year’s UN climate summit. The objective is to discuss action to tackle climate change.

In the US, the Federal Reserve meeting will provide the new interest rates decision. After some less hawkish stances from the Bank of Canada and the European Central Bank, the next FOMC will be scrutinized for any less hawkish moves that could be interpreted as a possible future pivot by the Fed.

Global growth and inflation data will be in the spotlight - as usual - with the publication of Q3 GDP and flash PMIs in the US and Europe, the PCE for the former and October CPIs for the latter.

Investors will increasingly focus on the Q3 earnings season. We expect releases from Netflix, IBM, Tesla, Bank of America, and Johnson & Johnson, among the bellwether names.

Inflation will be in focus with the publication of data stemming from the US, the euro zone, Japan and China, highlighting the divergent stages of monetary policy tightening the countries are dealing with. The Bank of Japan is currently the only one bucking the trend.

The US job report for September is expected to be around 250k creations. Investors are looking for signs of softness in the economy that could ease ongoing inflationary pressures.

Italy starts the week with a new right-wing government to build. Having won a majority of the vote, the far-right Fratelli d’Italia party, led by Giorgia Meloni, will lead the coalition talks. It may be a political shift for a pivotal European country.

Central banks will be in the focus. In the US, the FOMC will decide on an additional policy tightening. Another 75bp rate hike in its funds rate is expected. Also, the publication of its quarterly Summary of Economic Projections will shed light on the future path of its monetary policy.

Inflation data will be in focus in the US and some European countries. It will be the last published US CPI and household’s expectations before the September Fed’s meeting on September 21st.

Europe will be the first in focus with the announcement of the new leader of the Tory party in the UK. The Queen will officially appoint the designated successor to Boris Johnson. Polls are in favour of Liz Truss.

Markets will digest central bankers’ rather hawkish comments made in Jackson Hole. Fed Chair Jerome Powell noted that monetary policy will need to be restrictive for “some time”, warning that history “cautions strongly against prematurely loosening policy”.

This year’s Jackson Hole Symposium comes at a critical juncture for monetary policy as inflation is at a four-decade high and the Fed is implementing the sharpest tightening since the Paul Volcker’s era.

The markets will look at the next FOMC minutes. The Fed, which, decided to adopt a hawkish stance last month could announce an increase of fund rates.

Inflation will be in focus. Key markets, such as the US, China, Japan and some European countries will release either CPI, PPI or inflation figures.

Italy will also be under the spotlight in the coming weeks with the election of a new government. Italian political instability will be a hurdle to EU financial support.

The focus will be on the European Central Bank’s tolerance to Italy’s widening yield premium. The central bank has disclosed a new ECB’s Anti-Crisis Tool: the “Transmission Protection Instrument”. The statement is vague enough to leave a question mark over whether Italy can meet the conditions.