Eurozone inflation and tech giants’ performance in focus this week

Some important economic data and corporate earnings will determine market sentiment this week. IN Eurozoneseveral major economies will publish monthly data on inflation And Quarterly GDPwhich will provide information on the region’s economic trajectory and determine the future path of European Central Bank rates (ECB).

Globally, the focus will continue to be on USAwhere the non-farm payrolls report will be the most important data for financial markets. The world’s largest economy is also set to release third-quarter GDP data. Investors will pay special attention results of the main technology companiessuch as Alphabet, Meta Platforms, Apple and Amazon.

On the other hand, the solution Bank of Japan by interest rates, PMI in manufacturing and services China and CPI Australia will shed light on the evolution of these regional markets.

European Economic Data to Consider

It will be a busy week on the European economic front with Eurostat releasing key data for the major economies. Germany, SpainFrance and Italy will publish consumer price indices (CPI) October preliminary results and figures for GDP third quarter.

These economies have experienced strong reduction in inflation last month, mainly due to a significant year-on-year drop in energy prices. However, the eurozone’s composite consumer price index will be the most influential indicator for the region.

Headline inflation fell to 1.7% year on year.The European Central Bank (ECB) expects inflation to rise again in October due to base effects. Consensus forecasts suggest annual consumer price index could rise to 1.9% in October, while core inflation could ease slightly to 2.6% year on year.

Germany’s economy remains weak, while Spain’s economy maintains its growth trajectory

Regarding the gross domestic product (GDP) performance of these four economies, Germany still the weakestWith reduction its economy 0.1% in this second trimester. The German manufacturing sector has been shrinking for two years now, significantly dragging down the overall economy.

On the contrary, France, Italy and Spain experienced economic growth in the first two quarters, emphasizing Spain as the fastest growing economy in this group. The three countries are expected to maintain similar growth trends in this third quarterwhile the German economy is expected to continue contracting by 0.1%, according to consensus expectations.

In this United KingdomHe annual budget Governments will be in focus as the executive branch faces challenges of widening deficits, slowing economic growth and controlling inflation. The focus will be on taxes, government spending and social measures.

US labor market data changes expectations

The October non-farm payrolls report will be the most important data for world marketsbecause he will offer new tracks about the trajectory American labor market.

Data about Job in the USA they were surprisingly good V Septemberwith 254,000 new jobs and an unemployment rate that fell to 4.1% from 4.2% in the previous month.

The strength of the labor market has changed expectations and markets now expect Federal Reserve continue to reduce rates to slower paceby 0.25% in November compared to previously expected 0.5%. According to consensus forecasts, the United States could only add 110,000 new jobs, lowest since February 2021while the unemployment rate is expected to remain at 4.1% in October.

Weaker labor market likely will increase the chances that the Federal Reserve speed up the relaxation cyclewhat could stimulate markets stock market. Additionally, US GDP growth in the third quarter will be critical to market sentiment. Market participants believe that American economy located in one soft landing stagewith GDP growing by 3% in the second quarter.

Another strong quarter will further bolster expectations that the Federal Reserve will slow its easing cycle, which will likely send the dollar and stock markets higher. The world’s largest economy is expected to maintain growth 3% in this third quartercorresponding to the rhythm of the second.

As for the results, then tech giants such as Alphabet, Meta Platforms, Apple and Amazon will publish their quarterly resultswhich will provide valuable information about evolution artificial intelligence.

What economic developments will attract attention in the Asia-Pacific region?

In the Asia-Pacific region, the solution Bank of Japan O interest rates. The Bank of Japan raised official interest rates in March and July in an effort to support the yen and lower import prices. Given the decline in inflation in Japan in recent months, the bank is expected to maintain interest rates this week, especially ahead of the Japanese general election and the US presidential election.

Markets expect the Bank of Japan to raise rates again in December or January next year. Business activity China in the manufacturing and services sectors will also be fundamental to global markets. China’s manufacturing PMI fell for five straight months through September due to weak demand and low commodity prices. raw materials.

However, the September decline was the mildest of the series, indicating a possible rise Later. The manufacturing PMI is expected to return to growth, while the non-manufacturing PMI is likely to continue rising this month.

Australia will release inflation data for the third quarter, which will be a key indicator for the Reserve Bank of Australia (RBA) when deciding on its interest rate policy. The RBA is the only central bank that has not yet initiated rate cuts as part of the global easing cycle due to the ongoing economic crisis. inflation elevated. Therefore, the upcoming inflation data is very important for future policy decisions.

The monthly consumer price index was 2.7% in September, a sharp decline from 3.5% in August. According to consensus forecasts, annual inflation will cool down to 23% in the third quarter, which is likely to prompt the RBA to begin its easing cycle earlier than expected.