The week ahead - 14 - 18 October 2024
These are the Key Macro Events for the upcoming week.
United States – Retail sales for September is likely to show small positive growth of 0.1%, similar to last month, predominantly held back by lower gasoline prices. Labor market data showed hours worked in goods manufacturing coming down, and therefore we expect industrial production declined by 0.1%.
Eurozone – The ECB is widely expected to cut rates again on Thursday by 25bp, taking the deposit rate to 3.25%. In the press conference, President Lagarde is likely to acknowledge the increased downside risks to the growth outlook, while repeating the language from a recent speech that ‘latest developments strengthen our confidence that inflation will return to target in a timely manner.’ There are no updates to staff macroeconomic projections at this meeting. Eurozone industrial production is likely to rebound sharply on a monthly basis, and the German ZEW index is expected to stabilise at subdued levels, but the broad trend in industry remains weak.
The Netherlands – The unemployment rate is expected to edge up to 3.8% in September (3.7% in August). The participation rate peaked at 73.4% in June this year and has declined to 73.0% in August. The normalization of bankruptcies will provide relief, allowing labour dynamics to pick up a bit. The labour market remains tight but the peak is behind us. Given strong labour demand and limited available labour supply the unemployment rate is expected to remain low in the coming years.
China – Inflation, trade and activity data for September and GDP data for Q3 will be published the coming week. CPI inflation is expected to stay subdued. Annual growth of retail sales is expected to pick up a bit, but to remain at a weak pace. Consensus expectation including ours is for real GDP to have slowed further to around 4.5% yoy in Q3-2024 (Q2: 4.7%). On the policy front, no change in the 1-year medium-term lending facility rate is expected for now (after a 30bp cut last month). All eyes will be on the Finance Minister’s briefing on Saturday, in particular on further details about the scale and shape of fiscal stimulus in the pipeline.