ON DECK FOR THURSDAY, OCTOBER 9
KEY POINTS:
- Global markets treading water
- Germany’s economy is stumbling
- Philippines central bank delivers a surprise cut
- Mexican CPI to offer little chance at surprise
- US, Canada calendars are quiet
Boo our anthem huh. Pfff. Buh-bye.
Today should be a very light session by way of global calendar-based risk before we get Canadian jobs tomorrow into an early 1:30pmET close ahead of Thanksgiving. Global asset classes are largely range-bound this morning with little movement in sovereign yields or equities while the dollar is mixed.
GERMANY’S ECONOMY CONTINUES TO STUMBLE
Germany’s economy is struggling under the weight of global trade wars that the US started (chart 1). German exports fell -0.5% m/m SA in August (+0.2% consensus) but partly because of upward revisions to July (-0.2% instead of -0.6%). Still, exports have dropped in four of the past five months. Factory orders have declined for four straight months. Industrial output has dropped for five out of the eight months so far this year.
MEXICAN INFLATION UPDATE PENDING
Mexican monthly CPI often fails to surprise because estimates are release every two weeks. We’ll get the September update shortly (8amET). A mild acceleration to 3.8% y/y is expected along with a one-tick gain in core CPI to 4.3% y/y. Headline inflation remains above Banxico’s 3% target (chart 2).
SURPRISE CUT IN THE PHILIPPINES
The central bank of the Philippines surprised with a 25bps cut to its overnight rate, now at 4.75%. A minority had anticipated it. Guidance indicated that another cut is possible on December 11th and emphasized further room for easing.
LIGHT CALENDARS IN US, CANADA
The backup of US releases is getting deeper with now two weeks of suspended jobless claims plus nonfarm and next week's CPI is unlikely to be released then either. Claims won’t arrive this morning. There will be several Fed speakers on tap including Chair Powell but he only delivers welcoming remarks at a community bank event.
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