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Weekly Market Outlook: China GDP & UK data

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The mid-month week ahead is expected to remain mostly quiet. Being that it isn’t one of the exciting weeks in terms of data, focus shifts to China’s GDP figures that are due to be released on Friday. The data will provide further insights into the world’s second-largest economy.

Forecasts already point to a modest decline in the GDP to 6.1% from 6.2% previously. Meanwhile, a host of other data includes retail sales and industrial production.

In the US and European markets, the economic data for the week ahead will focus on retail sales, inflation reports from the UK among other things. It is a short week, however, with the US, Japan and Canadian markets closed for business.

Here’s a quick preview into the economic calendar for the week ahead.

Slow Week for the US Dollar

From the economic data perspective, not much is happening for the US dollar. The economic docket will see the retail sales report standing out.

This week is also a short one, as the US markets are opening on Tuesday, following Monday’s Columbus day bank holiday. Still, the data will give some insights into consumer spending.

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Slower Retail Sales Expected in September

For the month of September, retail sales are forecast to rise just 0.3% on the month. This marks a second consecutive month of slower retail sales. In August, retail sales slowed to a pace of 0.4% after rising 0.8% in July.

The weaker retail sales are forecast on the back of a dismal auto sales for September. The declines are mostly due to the shorter month and consumer bookings which increased in August due to the Labor day weekend.

Fed Members Take the Stage

A number of Fed members will be speaking over the course of the week. The speeches come as the markets try to find the pulse for the Fed. Expectations are high that the Fed will cut rates twice. But the general narrative from the bank has been mixed.

FOMC members Bullard (dove, voter), Bostic (neutral, non-voter), Daly (neutral, non-voter), Evans (dove, voter) will be speaking over the course of the week.

Will the Sterling React to Economic Reports?

The big news from the UK is the possibility that a Brexit deal could be reached. After months of delays and last-minute efforts, recent reports are optimistic. This comes as British PM met with his Irish counterpart and issued a joint statement.

With less than two weeks to go, the sterling might be muted to the economic data.

UK Inflation to Rise in September

Consumer prices in the United Kingdom were trending lower over the past two years. The Bank of England forecasts that inflation will remain weak into the fourth quarter of the year. This comes due to expectations of weaker domestic demand.

The consensus estimates are for headline CPI to rise 0.3% on the month. This brings the yearly inflation rate to 1.9%, up from 1.7% on the year in August. However, an uptick in inflation is unlikely to see any major shifts from the Bank of England.

UK’s Unemployment Rate to Rise

The monthly jobs report will be coming out on Tuesday, a day before the inflation data. The UK unemployment rate is forecast to rise to 3.9%, up from 3.8% previously. Overall, the UK’s job market has been faring better over the past months. At 3.8%, the unemployment rate is one of the lowest since the 1970s.

But signs of cooling employment is showing amid sluggish economic growth. Brexit uncertainty has hit businesses hard. This could potentially lead to a weaker pace of hiring.

UK average hourly earnings are forecast to rise by 3.9% excluding bonuses on the year. Meanwhile, wages including bonuses are forecast to fall to 3.7%.

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