Weekly Market Recap (16-20 October)

Monday

Over the weekend we got some tentative dialling back of threats from Iran and Hezbollah as an Iranian ambassador told a journalist that “Iran’s armed forces will not engage Israel provided it does not dare to attack Iran, its interests and nationals”, while a Hezbollah spokesperson said that “Sunday’s increase in the intensity of the exchanges doesn’t indicate Hezbollah has decided to fully enter into the Hamas-Israel war. The fighting on the border is “only skirmishes” and represents a “warning”. Moreover, the Palestinian Authority President Mahmoud Abbas said that the actions of Hamas do not represent Palestinian people. This has led to some positive risk sentiment creeping into the new week.

ECB President Lagarde (neutral – voter) acknowledges that the ECB will be patient at this point in time but remains vigilant of inflation risks around the labour market and the oil market:

Labor market still shows no real sign of weakening.
Participation in the employment and unemployment in nominal numbers are quite striking.
Downside risks include weaker demand, due for example to a stronger transmission of monetary policy or to a worsening of the international economic environment.
Growth could be slower if the effects of monetary policy turn out to be more forceful than expected, or if the world economy weakens further and geopolitical risks intensify.
Growth could also be higher than projected if the strong labour market, rising real incomes, and receding uncertainty boost confidence among consumers and businesses and lead them to spend more.
It’s not a question of being hawkish or dovish, but it requires us at this point in time to be patient, as supply shocks reverse and new shocks arrive, and be attentive to ensure that inflation expectations remain anchored when inflation is still too high.
The ECB is watching oil for inflation risks.

The New Zealand Services PMI bounced back into expansion:

Services PMI 50.7 vs. 47.1 prior.

BoE Governor Bailey (neutral – voter) signalled that rates are likely to remain at the current level as the BoE is ready to be patient and wait for the tighter monetary policy to feed through the economy:

Said he was puzzled by the continued strength of pay growth in the UK.
Said it’s not yet responded to the BoE's interest rate hikes.
Increases in borrowing costs were having an impact on employment numbers and in the housing market.
Potential growth in the UK has fallen from 2.25-2.5% in the past to at best 1.5% and that complicates monetary policy.
Signalled rates are likely to remain at around the current 5.25 per cent as policy has to be restrictive to get inflation back to 2%.
The last mile will be the hardest.

The PBoC left the MLF rate unchanged at 2.5% as expected.

BoE’s Pill (neutral – voter) remains wary of persistently higher inflation but acknowledges that the BoE has done a lot on interest rates already and wage growth could decelerate:

We have done a lot on interest rates.
Persistent inflation is the key element that we are watching.
If we have a persistent component of inflation, need persistent monetary policy response.
Not all wage indicators are pointing the same way right now.

Fed’s Harker (neutral – voter) reiterates that the Fed is likely done with interest rates increases and it should now be patient:

Current interest rate environment draining housing market of new buyers.
Reiterates US central bank very likely done with rate hikes.
Acknowledges the impact of recent Federal Reserve actions on the mortgage climate.
Highlights the Federal Reserve's commitment to price stability and the goal of returning inflation to a 2 percent annual target.
Discusses the impact of rising mortgage rates on housing market dynamics, including decreased inventory and elevated prices.
Notes the growth in new home sales but acknowledges the overall slowdown in the housing sector.
Mentioned his expectation of steady disinflation and a return to the 2 percent inflation target.
Acknowledges challenges in assessing trends in disinflation, such as monthly variability in prices.
Advocates a steady policy rate to press down on inflation and mentions outside factors influencing the economy.
Expects GDP growth to continue, with no anticipation of a recession.
Anticipates a slight increase in the unemployment rate but does not foresee mass layoffs.
Acknowledges various factors influencing the unemployment rate, such as labour force participation.
Emphasizes the need to balance both hard and soft data in making policy decisions.
Suggests that while the economy has faced significant challenges, fundamental changes have not occurred since 2018 or 2019.
Recognizes the resilience of the economy and the need to consider new data and viewpoints.
Believes a patient approach to monetary policy will lead to a soft landing and stable economic growth.
In the absence of some turn in the data the Federal Reserve should hold rates steady
Fed should not be considering more rate increases.

The BoC Business Outlook Survey indicator fell further into negative territory at -3.51% vs. -2.31% prior.

Details:

Overall survey indicator at the lowest since Q2 2020.
53% of firms expect inflation over 3% for the next two years, down from 64% in Q2.
27% of firms think it will take longer than three years to return to BOC's 2% inflation target, down from 32% in Q2.
Future sales indicator at 0 vs. 8 prior.
One third of firms expect Canada to be in recession next year, the same as in Q2.
More than 70% of firms say higher interest rates are negatively affecting them.
Firms report widespread easing in intensity of labour shortage.

ECB’s Lane (dove – voter) acknowledges the uncertainty that the ECB needs to navigate but reaffirms that the central bank will keep interest rates at the current level for some time:

The ECB's decision to raise interest rates took longer than the Federal Reserve's due to several factors.
In 2021, demand played a more significant role in driving US inflation, making monetary policy more immediate.
The ECB did not cut interest rates during the pandemic, unlike the Fed and BoE, so the initial rate increases were reversing pandemic cuts.
The primary source of inflation was the energy shock, as reflected in consumer surveys.
Raising rates helps mitigate the impact of energy price increases on consumer prices.
The ECB aims to slow down wage growth in 2024 to help inflation return to 2%.
The ECB's single interest rate policy requires national policies to fill gaps in individual countries.
The ECB's balance sheet is shrinking as it stops reinvesting proceeds from maturing bonds, and bond sales are not a primary concern.
The ECB will keep interest rates high until inflation returns to 2%, but this may take some time.
The "neutral" level for interest rates is likely around 2%, reflecting long-term average policy rates.
The ECB acknowledges the need to express humility in the face of uncertainty and learn from unexpected developments.
The ECB's policy decisions are driven by the need to address high inflation rather than a particular faction within the institution.

The New Zealand CPI missed expectations:

CPI Y/Y 5.6% vs. 5.9% expected and 6.0% prior.
CPI Q/Q 1.8% vs. 2.0% expected and 1.1% prior.

Tuesday

The RBA released the Minutes of its October Monetary Policy Meeting:

At October meeting board considered raising rates by 25bp or holding steady.
Board members judged that case for holding steady was the stronger one.
Members noted data on inflation, jobs and updated forecasts would be available at November meeting.
Members acknowledged upside risks to inflation were a "significant concern".
Progress in lowering service sector inflation was slow.
Board had "low tolerance" for a slower return of inflation to target.
Further tightening may be required if inflation more persistent than expected.
Rising house prices could support consumption, might be signal policy not as tight as assumed.
Full effects of past hikes would not be evident in data for some months.
Data suggested economy continued to grow modestly in the September quarter.
Members believed the labour market had reached a turning point.
Members noted there were few signs of wage price spiral materialising.
Fall in A$ vs. US$ had eased monetary conditions, though only at the margin.
Trade weighted A$ only slightly lower than at start of year, limiting impact on imported inflation.
Challenges to China economy could impact Australia if not contained.

The UK September labour market report was only partial as the ONS delayed some of the data to the next week due to falling response rates:

UK Payrolls Change -11K vs. -8K prior (revised from 0K).
Average weekly earnings incl. Bonus 8.1% vs. 8.3% expected and 8.5% prior.
Average weekly earnings ex-Bonus 7.8% vs. 7.8% expected and 7.9% prior (revised from 7.8%).

The German October ZEW survey beat expectations although it remains deeply negative:

Current conditions -79.9 vs. -80.8 expected and -79.4 prior.
Outlook -1.1 vs -9.3 expected and -11.4 prior.

The Canadian CPI data missed expectations across the board which lowered the risk of another rate hike from the BoC next week:

CPI Y/Y 3.8% vs. 4.0% expected and 4.0% prior.
CPI M/M -0.1% vs. 0.1% expected and 0.4% prior.
BoC Core Y/Y 2.8% vs. 3.3% prior.
BoC Core M/M -0.1% vs. 0.1% prior.
CPI median 3.8% vs. 4.1% prior.
CPI trim 3.7% vs. 3.9% prior.
CPI common 4.4% vs. 4.8% prior.

The US September Retail Sales beat expectations by a big margin with positive revisions to the prior figures:

Retail Sales Y/Y 3.8% vs. 2.9% prior (revised 2.5% prior).
Retail sales M/M 0.7% vs. 0.3% expected and 0.6% prior (revised from 0.2%).
Ex-autos 0.6% vs. 0.2% expected and 0.9% prior (revised from 0.6%).
Control group 0.6% vs. 0.0% expected and 0.2% prior (revised from 0.1%).
Retail sales ex gas and autos 0.6% vs. 0.3% prior (revised from 0.2%).

The US NAHB Housing Market Index missed expectations as it continues to fall given the surge in long term yields:

NAHB 40 vs. 44 expected and 44 prior (revised from 45).
The index has fallen for the 3rd straight month.
Single-family sales current 46 vs. 50 prior.
Single-family sales next 6 months 44 vs. 49 prior.
The traffic of prospective buyers 26 vs. 30 prior.

Fed’s Barkin (neutral – non voter) sees clear progress on inflation and once again we hear a comment about long term yields doing the job for the Fed:

Anecdotal information points to better labour demand and slowing growth.
Fed has time to see data before making next rate hike move.
Path for inflation is not yet clear, but sees clear progress.
Wage pressures remain but overall, they have moderated.
Still seeking confirmation that economy is slowing.
Businesses see less pricing power but still willing to probe on price increases.
If recession arrives, it's possible it would be milder than other downturns.
I see an economy that is much further along the path to demand normalization.
Longer-term rates have moved up and that has tightened conditions.
I believe we have a restrictive policy stance.
Rate moves work through financial conditions.
I don't know where rates will be three weeks from now given what's happening globally.
Says the next meeting will have a good debate.
Declines to say what he will support at the next meeting.

Late in the evening a rocket hit a hospital in Gaza killing hundreds of people and sparking a global outrage. It’s not yet clear who is responsible for the bombing as Israel and Hamas trade blame as reported on Bloomberg with Hamas blaming Israeli airstrikes and Israel saying that it was a failed rocket launch by the Palestinian Islamic Jihad group. Following this unfortunate episode though, Jordan cancelled the summit that was scheduled between the US President Biden, the Palestinian President Abbas and the Egyptian President al-Sisi in Amman.

Wednesday

ECB’s Holzmann (hawk – voter) remains wary of further shocks that might require additional hikes:

We are not out of the woods yet on inflation.
Further shocks may require additional ECB rate hikes.
Payments on bank reserves are a huge problem.

RBA Governor Bullock is worried about supply shocks but acknowledges that we haven’t yet seen the full impact of past rate hikes:

Bit more worried about inflation impact from supply shocks.
We are seeing demand slow, per capita consumption is declining.
Have not yet seen full impact of past rate rises on consumption.
If inflation remains higher than expected, will have to respond with policy.
We think we are running narrow path, but very alert to upside inflation risks.

The Chinese Q3 GDP beat expectations:

GDP Q3 Y/Y 4.9% vs. 4.4% expected and 6.3% prior.
GDP Q3 Q/Q 1.3% vs. 1.0% expected and 0.8% prior.

The Chinese Industrial Production Y/Y beat expectations coming in at 4.5% vs. 4.3% expected and 4.5% prior.

The Chinese Retail Sales Y/Y beat expectations coming in at 5.5% vs. 4.9% expected and 4.6% prior.

The UK CPI slightly beat expectations but it’s unlikely to change the current BoE’s “wait and see” stance:

CPI Y/Y 6.7% vs. 6.6% expected and 6.7% prior.
CPI M/M 0.5% vs. 0.5% expected and 0.3% prior.
Core CPI Y/Y 6.1% vs. 6.0% expected and 6.2% prior.
Core CPI M/M 0.5% vs. 0.5% expected and 0.1% prior.

ECB’s Visco (dove – voter) is wary of second-round effects keeping underlying inflation above the ECB’s 2% target:

Monetary policy reaction was necessary.
Second-round effects are keeping inflation at levels not consistent with underlying monetary and price stability.

Fed’s Harker (neutral – voter) reaffirmed his preference for keeping rates steady:

Pause on rate hikes should be extended.
Workings of the economy cannot be rushed.
Fed can wait until early next year to decide if we have done enough.

Fed’s Waller (neutral – voter) acknowledges the improvements on the inflation front without too much damage to the economy and leans towards keeping rates higher for longer rather than increasing rates further:

It's too soon to tell if more policy action needed.
More action on policy rate would be needed if demand, and economic activity keep up recent pace.
We can wait, watch and see before making definitive news on policy path.
If real economy slows, we can hold policy steady.
Past few months' data has been overwhelmingly positive for employment and inflation goals.
I will be watching how recent long-term rate rise evolves and its impact on economy and financial conditions.
I will be patient in waiting for data to document how spending evolves.
Anticipate 'unusually tight' labour market to continue loosening but watching closely.
Will watch next 'several' inflation reports for clearer indication on trajectory to 2%.
We can run our balance sheet down a total of $2 trillion to $2.5 trillion and keep reserves ample.
If saw inflation coming down to 2.5%, Taylor rule would say to cut rates.
We need to see how inflation progresses in 6 to 12 months, then see about cutting rates.
We still have one rate hike pencilled in, will be totally driven by the data if it happens or when.
Higher long rates for whatever reason puts in tightening.
If long rates go up and persist, that will do some of the Fed work.
Still seems to be more potential excess consumer saving than people think.
Consumer spending has been surprising.
Still hopeful rate hikes will slow spending, inflation.
Data shows job market can call a reduction in job vacancies and not necessarily loss of jobs.
Events in Middle East horrific, but hard to see much impact on US macroeconomy.
Balance sheet reduction was priced in a long time ago. All Fed is doing now is fulfilling that expectation.

Fed’s Williams (neutral – voter) just acknowledges the improvements on the inflation front and reaffirms the commitment to keep at it until the job is done:

Inflation has come down quite a bit.
Still has ways to go getting inflation back to target.
Will "stick at it" to get inflation back to target.
At some point it will make sense to lower rates.
Fed needs restrictive monetary policy for a while to cool inflation.
The path of monetary policy depends on the data.

Fed’s Bowman (hawk – voter) didn’t offer much on the policy outlook, although she remains the most vocal member supporting another rate hike:

Inflation has come down but is still too high.
What has been somewhat surprising, however, is that the relative strength in goods spending has persisted, rather than reverting to its pre-pandemic trends.
This pattern we see in the U.S. is also unusual relative to other advanced economies, where the composition of goods versus services spending appears to have returned to historical norms.

The Fed’s Beige Book basically showed a stable economy with inflation and labour market tightness easing:

Most Districts indicated little change in economic activity since September report.
Consumer spending was mixed.
Tourism activity continued to improve.
Consumer credit quality was generally described as stable or healthy.
Real estate conditions were little changed and the inventory of homes for sale remained low.
Manufacturing activity was mixed, although contacts across multiple Districts noted an improving outlook for the sector.
The near-term outlook for the economy was generally described as stable or having slightly weaker growth.
Expectations of firms for which the holiday shopping season is an important driver of sales were mixed.
Labor market tightness continued to ease across the nation.
Prices continued to increase at a modest pace overall.
Districts noted that input cost increases have slowed or stabilized for manufacturers but continue to rise for services sector firms.
Firms expect prices to increase the next few quarters, but at a slower rate than the previous few quarters.

Thursday

The Australian jobs report missed expectations as the labour market continues to soften:

Employment change 6.7K vs. 20.0K expected and 63.3K prior (revised from 64.9K).
Full-time employment -39.9K vs. 7.2K prior (revised from 2.8K).
Unemployment rate 3.6% vs. 3.7% expected and 3.7% prior.
Participation rate 66.7% vs. 67.0% expected and 67.0% prior.

The Canadian PPI beat expectations:

PPI M/M 0.4% vs. 0.3% expected and 1.9% prior (revised from 1.3%).
PPI Y/Y 0.6% vs. 0.0% prior (revised from -0.5%).

The US Initial Claims beat expectations once again, but Continuing Claims missed for the second time in a row suggesting that workers are finding it harder to get another job after being laid off:

Initial Claims 198K vs. 212K expected and 211K prior (revised from 209K).
Continuing Claims 1734K vs. 1710K expected and 1705K prior (revised from 1702K).

The Conference Board Leading Economic Index for September fell -0.7% vs. -0.4% expected and -0.4% prior (revised from -0.5%). This is the 18^th monthly decline in a row.

Fed Chair Powell (neutral – voter) delivered a very comprehensive speech and the tl;dr is that the Fed wants to see more data before increasing rates again especially given the rise in long term yields:

FOMC is 'proceeding carefully'.
More evidence of above-trend growth or that the labour market is no longer easing, could warrant further hikes.
Extent of additional firming and how long to keep policy restrictive will depend on data, outlook and balance of risks.
Significant tightening financial conditions with higher bond yields can have implications for policy, we are attentive.
Policy stance is restrictive.
Recent data shows ongoing progress toward inflation and employment goals.
Return to 2% inflation likely to require period of below-trend growth and some further softening of the labour market.
A few months of good data is only the beginning of what it will take to build confidence on the inflation path.
Indications of wage growth show a gradual decline towards levels that would be consistent with 2% over time.
Inflation readings turned lower over the summer, a very favourable development. The September inflation data continued the downward trend but were somewhat less encouraging.
Shorter-term measures of core inflation over the most recent three and six months are now running below 3 percent.
We are attentive to recent data showing the resilience of economic growth and demand for labour.
Economy is very resilient, growing strongly.
Growth is running above its longer run trend. That is a surprise.
Economy is a story of stronger demand.
May be ways economy is less affected by interest rates.
Interest-sensitive spending is a showing impact of Fed policy.
We see policy working through usual channels.
I don't think there is a fundamental shift in how rates affect economy.
We are seeing a change in the exchange rate which is disinflationary.
The fact that we have a strong economy and job market, these are elements we want to see.
No precision in understanding monetary policy lags.
Markets have been front running Fed policy changes.
Household savings are higher, spending has been higher.
We should be seeing effects of monetary policy arriving.
Fed has slowed on rates to give policy time to work.
We have to use eyes and risk management to monitor monetary policy impact.
There is a lot of uncertainty on lags.
We are moving carefully with policy decisions.
Long-run potential growth doesn't change much. It is around 2%.
It is very hard to know how economy can grow with higher rates.
Doesn't know where monetary policy will settle.
Effective lower bound is not an issue for economy, monetary policy.
By any reckoning, neutral rates ebbed over recent decades, unsure where it is now.
Models useful but have to look at what the economy is telling us.
The evidence is not that policy is too tight.
It's possible we are going into a more inflationary period, but it's hard to know.
Fed’s issue is trying to get policy right to bring inflation back to 2%.
With hindsight possible Fed could have done less during pandemic.
Our economy is doing very well.
We were in a time of disinflation. That period is over. We are now more in a balanced period.
The possible range of events is now so much wider.
Bond yields analysis needs humility.
Bond yields are not about expectations of higher inflation, monetary policy review.
Bond yields rise driven by term premiums.
Markets are seeing economic resilience and revising views.
Markets may be responding to deficits, Fed balance sheet actions.
Bond yield rise is tightening financial conditions.
Bond yield rise is not principally about expectations of Fed doing more.
Bond yield rise doesn't seem to be about expectations of Fed doing more on rates.
Is unclear if bond yield rise will be persistent, markets are volatile.
We will let market yield rise play out, Fed will watch it.
For now, it's clearly a tightening of financial conditions.
We know fiscal path is ultimately unsustainable.
Current fiscal situation does not affect Fed near-term policy choices.
Overseas treasury buying has remained robust.
Business contacts saying economy remains strong.
Cost of capital could be issue for small companies.
Fed policy is blunt, but it's what the Fed has to tackle inflation.
We know Fed actions are having a negative impact on parts of the economy.
Fed must get back to price stability.
The world count on us to have lower and stable inflation.
Fed independence is for time when policy choices are tough.
Higher bond yields are producing tighter financial conditions which the Fed wants.
Higher bond yields is a tightening, and at margin could reduce the need for Fed to tighten.
At margin higher yields take some pressure off Fed to raise rates.
A whole lot of people left the labour market and didn't come back after the pandemic.
There are many signs labour market getting back into balance.
Labor market is gradually cooling by so many measures.
There has been new labour market supply.
It's still a very tight labour market, but it's getting looser.
Labor force increases, and immigration increases is being seen in the labour markets.
I don't think most of inflation is from job market (Phillips curve), was demand driven.
Things have settled down on the banking front.
Paid a lot of attention to banks that appear to have issues.
Bank stress has really settled down, Fed is still watching for trouble.
Banks are strong, and well-capitalized.
Banks are much better at managing risk compared to the past.
Banks in the US are generally well-capitalized and strong.
Work from home is affecting downtown real estate and a lot of big cities.
Commercial real estate is not a big risk for biggest banks. It is a bigger risk for smaller banks.
Doesn't see systematic risk from commercial real estate problems.
Bank regulators are working with banks that have concentrations of risk in commercial real estate.
Regional banks are very important. Mega banks are in very good position.
Regional bank business model under pressure, Fed doesn't want to add to that pressure.
Fed strongly thinks smaller banks are very important.

ABS News reported that the Israeli Military has received the “green light” to move into Gaza whenever it’s ready as tensions in the Middle East intensify.

Fed’s Goolsbee (dove – voter) just stated the obvious:

Haven't seen a recession and I'm hopeful we can avoid one.
The US labour market has eased but is still strong.

Fed’s Bostic (dove – non voter) doesn’t see signs of a wage-price spiral:

Has not seen a wage-price spiral.
Wages are a lagging indicator in the current economy.
Believes that the Fed can control inflation without causing big damage to the jobs market.
Sees no reason to change the Fed's 2% inflation target right now.

Fed’s Harker (neutral – voter) reiterates the Fed’s “wait and see” stance:

Says latest data is slightly stronger than his forecasts.
Resolute and patient policy stance should enable a soft landing.
Will support further rate hikes if needed.

Friday

Fed’s Logan (hawk – voter) welcomes the rise in long term yields:

Has seen welcome progress on inflation but it's still too high.
Not yet convinced we are moving to 2% inflation.
Economy continues to outperform, labour markets still tight.
Important to have restrictive financial conditions broadly speaking.
Fed has some time to watch economy, markets before deciding on monetary policy.
Fed has been unified in restoring price stability.

Some part of bond yield rise is tied to term premiums.
Some part of bond yield rise is also tied to strength of economic data.
Rise in bond yields has been pretty orderly.
Bond markets are functioning, but still watching for trouble.
Not thinking about when Fed might cut rates.
Central bank market support interventions should be rare, transparent.
Fed has taken important steps to provide market liquidity backstops.
Anecdotal information is important for policy making.
Persistent rise in bond yields could mitigate need for Fed rate hikes.
Tighter financial conditions desired, will slow economy.
NY Fed has extensive dashboard to monitor money markets.
Reverse repo facility running down very smoothly.
Quite uncertain what right level of reserves is for banks.
Need to get Fed reverse repo facility close to zero.
Unsure how fast reverse repo facility will shrink.
Sees quite a bit of time left for balance sheet runoff.

The Japanese CPI continues to ease but the Core-Core indicator still hovers around cycle highs:

CPI Y/Y 3.0% vs. 3.2% prior.
CPI M/M 0.3% vs. 0.2% prior.
Core CPI Y/Y 2.8% vs. 3.1% prior.
Core-Core CPI Y/Y 4.2% vs. 4.3% prior.

The PBoC left the Loan Prime Rates (LPR) unchanged as expected:

LPR 1-year 3.45% vs. 3.45% prior.
LPR 5-year 4.20% vs. 4.20% prior.

BoE Governor Bailey (neutral – voter) expects inflation to fall markedly next month and the tone suggests that he leans towards a pause at the upcoming rate decision:

Expect a 'marked fall' in inflation next month.
September inflation figures not far off what we were expecting.
Core inflation fell slightly from what we expected, that is quite encouraging.
We will see more evidence of lower inflation by year-end.
Pay growth still well above anything consistent with inflation target.

The UK September Retail Sales missed across the board by a big margin:

Retail Sales M/M -0.9% vs. -0.2% expected and 0.4% prior.
Retail Sales Y/Y -1.0% vs. -0.1% expected and -1.3% prior (revised from -1.4%).
Retail sales ex autos, fuel M/M -1.0% vs. -0.4% expected and 0.6% prior.
Retail sales ex autos, fuel Y/Y -1.2% vs. -0.2% expected and -1.3% prior (revised from -1.4%).

BoJ Governor Ueda didn't offer much on the policy outlook:

Economy likely to continue with moderate recovery.
Consumption is increasing steadily.
The pace of inflation rise likely to slow, then re-accelerate again reflecting changes in wages, price-setting behaviour.
Must carefully watch financial market moves and their impact on the economy.
Need to manage interest rate risk increasing given very high uncertainty on economic, price outlook.

The Canadian August Retail Sales slightly beat expectations with the advance estimate pointing to a flat reading for September:

Retail Sales M/M -0.1% vs. -0.3% expected and 0.4% prior (revised from 0.3%).
Retail Sales Y/Y 1.6% vs. 2.1%.
Retail Sales Ex autos M/M 0.1% vs. 0.0% expected and 1.1% prior (revised from 1.0%).
Retail Sales Ex autos and gas M/M -0.3%.
September advance estimate 0.0%

Canada Retail Sales YoY

The highlights for next week will be:

Tuesday: AU-JP-EZ-UK-US PMIs, UK Unemployment Rate.
Wednesday: Australia CPI, German IFO, BoC Policy Decision.
Thursday: ECB Policy Decision, US Durable Goods, US GDP Q3, US Jobless Claims.
Friday: Tokyo CPI, Australia PPI, US Core PCE.

That’s all folks. Have a great weekend!