Key releases I’m watching this week.
Brazilians will go to the polls on Sunday, the Nobel Prize for economics is awarded on Monday, while the IMF and World Bank kick off their annual meeting in Bali Tuesday, US inflation data is due on Wednesday and Thursday, J.P. Morgan Chase & Co. and CitiGroup Inc. reports Friday.
Besides electing a new president, all members of the Chamber of Deputies and two-thirds of the 81 senators will be contested. The markets will especially be following the presidential election with some nervousness, as the Brazilian economy is screaming for a reform front-runner who can secure the long-term sustainability of public finances. Leftist” Lula proxy, Fernando Haddad, is along with far-right and populist candidate, Jair Bolsonaro, the two favorites.
None of these candidates are, however, ideal in the eyes of markets. As Brazil’s electoral system requires a candidate receiving more than 50% to get elected in the first round, the most likely outcome is Bolsonaro and Haddad facing each other in a second run-off scheduled 28 October 2018.
The week starts off with a light day on the data front. From Norway, we get manufacturing production numbers. The Fed’s Bullard (dove, nonvoter) speaks in Singapore.
There will be a lot of media coverage of Norway’s 2019 budget proposal, but it is seldom given much weight in the market. However, Norges Banks makes explicit fiscal policy assumption. For 2019 Norges Banks expects the deficit the non-oil structural budget (“spending of oil money”) to increase by 0.1% of mainland GDP, which means a very minor fiscal stimulus. There is room for a stronger increase in deficit while still keeping the budget in line with the spending rule. But given Financennce minister’s talj abiyt a “tight” budget and the outlook for the economy, we share Norges Bank’s assumptions about only a minort deficit increase.
Tuesday is also a light day with regard to key events. From Norway, we receive monthly GDP data – a new figure which has just recently started to be published.
as it opens its annual meeting with the World Bank in Bali, Indonesia. IMF Managing
From the US we receive the NFIB Small Business Optimism. The FOMC members Williams (hawk.neutral, voter) and Harker (neutral, non-voter) speak during the day.
Wednesday is a big Scandi inflation day. We receive inflation numbers from both Demark and Norway, and from Sweden, we get the unemployment rate. The Fed’s Williams (hawk/neutral, voter) and Evans (dove,non-voter) speak during the day.
Economists’ forecasts that U.S. producer prices, excluding food, energy and trade
services, rose 2.6 percent in September. That’s near the fastest pace since 2011, and up from 2.3 percent reported in August. The forecast shows economists expect the data to show the August decline was a temporary dip in a longer-term rise in producer prices as increased tariffs threaten to raise costs.
Thursday is filled with interesting releases. From the US, we get inflation figures and the ECB publishes its monetary policy accounts. From Sweden, we get inflation figures and housing prices. The Fed’s Bostic (dove, voter) speaks during the day.
Before U.S. inflation data is released at 8:30 a.m. ET, gain insight on market expectations for long-term inflation.
J.P. Morgan Chase & Co and CitiGroup Inc. report Thursday and Friday, respectively. Here is graph showing the Basic EPS for both Banks in the subsequent quarters.
On Friday the calendar is light. Final German inflation figures are released, and we receive trade balance numbers from both the US and China, which could prove interesting given the ongoing trade dispute between the two countries. The Fed’s Evans (dove, non-voter) and Bostic (dove, voter) speak during the day.
-R.W.N II, yours in 322.
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