By Dow Jones Newswires staff
Below are the most important global events likely to affect FX and bond markets in the week starting Oct. 13.
Focus remains on developments related to the U.S. government shutdown and any indications regarding prospects of further interest-rate cuts by the Federal Reserve. A continued shutdown could mean more economic data are delayed.
In Europe, inflation data will be watched. Markets across Asia will focus on monetary policy signals and key data releases that could shape the region's growth and inflation outlook. Trade figures from China are expected to show how the world's second-largest economy is coping with external headwinds as tariff-frontloading fades. Growth data from Singapore and Malaysia, along with central bank minutes from Australia, will also be in focus.
U.S.
The U.S. Bureau of Labor Statistics will bring some furloughed employees back to work so it can publish the inflation report for September, an administration official said. The official suggested it will be published sometime this month although it is unclear whether it will be released on Wednesday as originally scheduled.
The U.S. government shutdown delayed the key U.S. nonfarm payrolls report for September and the timing of its release and other official data remains uncertain. That leaves the Federal Reserve without the latest economic indicators to help its decision-making for the interest-rate path.
"With little new data due to the shutdown, a rate cut this month is likely and fully priced," Citi analysts said in a note.
Market pricing implies the Fed will deliver further rate cuts at the Oct. 29 meeting and in December, LSEG data show.
Other data due during the week, which may be delayed as well, include retail sales and producer prices for September alongside weekly jobless claims on Thursday, followed by September housing starts and September industrial production on Friday.
Eurozone
Focus remains on French politics following the surprise resignation of Prime Minister Sebastien Lecornu on Oct. 6. Lecornu resigned less than a month into the role amid fraught budget negotiations.
The eurozone's data calendar is thin, with Germany's ZEW business sentiment index due on Tuesday.
"ZEW sentiment data on Tuesday is expected to soften, with the focus on whether weaker current conditions dampen optimistic expectations," Patrick Munnelly, Tickmill Group's market strategy partner, said in a note.
Final CPI data for September is due from Germany on Tuesday, from Spain on Wednesday and the eurozone on Friday.
Eurozone industrial production data is due on Wednesday.
Germany will launch a new December 2027-dated Schatz on Tuesday and will tap 2050- and 2056-dated Bunds on Wednesday.
Other issuers include the Netherlands and Italy on Tuesday, Greece on Wednesday, and Spain and France on Thursday.
U.K.
U.K. jobs and gross domestic product data will be in focus. The Bank of England remains in a tough spot as inflation remains elevated while economic growth is relatively weak. This is likely to keep policymakers cautious about cutting interest rates again at upcoming meetings.
U.K. money markets price only a small chance that the BOE will cut rates again by the end of the year. However, if economic data is particularly weak the chances of near-term rate cuts could increase.
Jobs data is due on Tuesday, followed by August GDP and industrial production figures on Thursday. Investec Economics expects a 0.3% monthly gain in GDP in August, after a flat July.
Several Bank of England members including the Gov. Andrew Bailey are due to speak. The speakers may signal the outlook for future rate cuts, but they are unlikely to indicate a possible rate cut in November, Investec Economics said in a note. "In our view, neither the inflation nor growth outlook seem set to change sufficiently over the next month for the committee to sanction a further cut in November."
Investors, meanwhile, continue to remain cautious amid uncertainty ahead of the government's budget on Nov. 26.
The Debt Management Office is due to auction index-linked gilts maturing in August 2031 on Wednesday.
Scandinavia
The final Swedish inflation data for September is released on Wednesday. Preliminary data showed the consumer price index with fixed interest rate eased to 3.1% in September from 3.2% in August. Inflation looks set to fall further next year partly due to cuts to VAT on food and taxes on electricity, Capital Economics economist Adrian Prettejohn said in a note. There is also been a notable easing in firms' price expectations recently, suggesting underlying price pressures are also cooling, he said.
"Despite that, we think that the Riksbank is done with rate cuts as activity data have picked up recently and the conditions for a strong economic recovery next year are in place."
Norway will hold a government bond auction Wednesday, while Sweden will sell inflation-linked bonds on Thursday.
Japan
Investors will look for hints on the timing of the Bank of Japan's next interest-rate increase in remarks from policymakers. BOJ policy board member Naoki Tamura will address business leaders in Okinawa on Thursday, while Deputy Governor Shinichi Uchida will speak on Friday.
Machinery orders data for August, an indicator of capital spending, is scheduled for release on Thursday.
Japanese markets are closed on Monday for a national holiday.
The Bank of Japan will conduct outright purchases of four segments of the government bond market on Thursday, including sovereign debt with maturities of more than five years and up to 10 years, and those exceeding 25 years. The planned purchases are expected to support the domestic bond market.
The ministry of finance will auction about 800 billion yen of 20-year JGBs on Wednesday. The sale will provide an opportunity to gauge investor risk appetite and long-term supply-demand dynamics amid mixed market conditions, Barclays's FICC Research said in a report.
While political and fiscal uncertainties in Japan could take time to resolve, the term premium--which recently rose for longer tenors--has since gradually declined and stabilized, suggesting short-term supply-demand conditions haven't deteriorated significantly, the members added.
Australia
Central bank watchers have a full calendar ahead, starting with the Reserve Bank of Australia's minutes from its September meeting on Tuesday. The RBA board unanimously voted to keep interest rates unchanged at 3.60%, and the minutes could provide clues as to whether it is leaning toward additional policy loosening and its timing.
Also in the calendar are speeches by RBA Assistant Governors Sarah Hunter and Chris Kent on Wednesday and Thursday, respectively. Gov. Michele Bullock is scheduled to join a fireside chat at a forum in Washington D.C.
The data slate is headlined by September employment figures on Thursday. Commonwealth Bank of Australia expects the addition of around 30,000 new jobs last month, with the unemployment rate steady at 4.2% and the participation rate inching up to 66.9%.
New Zealand
It is quiet on the data front in New Zealand as the dust settles after an emergency interest-rate cut. Economists are assessing the impact of the central bank's decision to lower rates by 50 basis points, bringing the total reduction in the official cash rate to 300 basis points since mid-2024.
Economists will get a look at how rate cuts are affecting New Zealand's residential property sector with the REINZ house price index for September on Monday. In a note, ANZ said the tenor of recent data suggests that seasonally adjusted house prices will be flat or slightly down month-on-month.
"However, seasonality typically adds a substantial 0.7 percentage points to monthly REINZ house price growth in September, so the raw unadjusted data is quite likely to show a small increase in prices," ANZ said.
China
A slate of Chinese economic data is set for release next week as markets assess how the economy performed at the end of the third quarter and in the wake of continuing U.S.-China trade tensions.
September trade figures will be front and center of investors' minds, with economists expecting export growth for the month to moderate as earlier frontloading activities ease.
Citi economists forecast exports to grow 5.5% on year, down from its previous estimate 10%, due to Typhoon Ragasa driving cargo throughput into decline in late September. Citi projects import growth at 1.5%, resulting in a trade surplus in USD terms of $95.1 billion.
On Wednesday, China will release its September consumer and producer price indexes. Citibank economists forecast CPI to fall 0.2% on year, with pork prices dropping another 2.6% from August. Nonfood prices, including autos, home appliances, and jewelry, may benefit from the government's anti-price war campaign, trade-in incentives, and rising gold prices.
DBS projects headline CPI to fall 0.2% on year and core CPI to rise slightly, supported by firmer prices in industrial consumer goods.
Markets will also watch for the latest foreign direct investment data slated for release on Wednesday.
Singapore
Singapore's advance gross-domestic product estimates for the third quarter are due Tuesday.
Barclays projects GDP expanded 3.0% from a year earlier, describing the performance as "remarkably resilient."
That strength likely gives the Monetary Authority of Singapore little reason to ease policy, Barclays economists said in a note. The MAS's monetary-policy statement, also due Tuesday, is expected to extend the central bank's July pause, according to a poll by The Wall Street Journal.
The policy decision could be a close call between flattening the policy-band slope and leaving settings unchanged, said OCBC strategist Christopher Wong. While the door remains open for easing if Singapore's growth and inflation deteriorate more than expected, the central bank is likely to preserve policy ammunition for now, he added.
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10-10-25 1047ET
