Third-quarter earnings season gets underway with companies reporting results amid a challenging environment. A stronger dollar and persistently high inflation keep investors on their toes.
For the most part, volatility continued to seep into global financial markets this past week.
A market selloff has lowered stock valuations, but a downgrade in the earnings outlook could dampen equities’ attractiveness.
After this round of results, we will have a good handle on how healthy the consumer is and if we are starting to see further signs inflation is easing.
Forex traders will be closely watching the yen amid speculation that the Bank of Japan could take new steps to shore up the currency after intervening in markets last month for the first time since 1998.
Japan is an outlier among global central banks as it focuses on supporting a fragile economic recovery.
This week, China’s key economic data will likely show a fragile recovery as stringent Covid policies and a property-market slump continues to batter consumer and business confidence.
Inflation data is squarely focused on this week, with reports from Canada, the Eurozone, Japan, New Zealand, and the UK.
What else apart from the third-quarter earnings season?
The US economic calendar is limited, with Fed speakers being the main draw.
In the wake of last week’s hotter-than-expected U.S. inflation data focus will turn to the housing market.
Thursday will be the key day for economic reports with housing starts data. Reports due on building permits, housing starts and existing home sales.
The economic calendar also includes reports on industrial production and initial jobless claims. In addition, Wall Street will pay close attention to the latest round of Fed regional surveys. The Empire Manufacturing Survey and Philly Fed business outlook will likely remain in contraction territory.
Investors will also look at Wednesday’s U.K. inflation data for September, which expect to hit double digits. Economists polled by Reuters expect the UK consumer price index to rise to 10% per cent for the year to September from 9.9% in August.
Economists expect Retail sales figures on Friday to point to a decline in consumer spending.
Christine Lagarde will speak at the IMF/World Bank event over the weekend, which could shed some light on what we can expect on 27 October.
For more economic events, watch our Economic Calendar.
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