Normally the first monthly and quarterly releases of economic data from China would dominate attention this week, while the start of the US third quarter earnings season would also be a contender for equal attention.
But overshadowing it all is the second US Presidential debate later today – it could very well be the defining moment of this campaign and decide the winner on November 8.
After the weekend of controversy over Donald Trump’s lewd comments about women, his daughter, and giving the string impression of being a sexual predator, anything could happen.
The comments and controversy they caused have heaped increasing pressure on Trump to quit, but he is resisting. Dozens of senior Republicans have urged him to quit, but he has been resisting those calls.
That means the debate, starting at Noon today Sydney time, will be watched by hundreds of millions of people in the US and around the world, simply to see if Trump turns up, how he handles himself and especially if he explodes and rants and raves.
The controversy has taken the pressure off Hiliary Clinton and is well-timed given she was the subject of another Wikileaks dump of hacked information (the US government now officially blames Russia for the hacking).
Meanwhile, trade data for China for September, September quarter and first nine months of the year will be issued on Thursday, followed by inflation figures on Friday, with more releases to follow the next week.
Analysts expect no real improvement in either export or imports, with perhaps a slower rate of fall in imports. The inflation figures will see another easing in the rate of producer price deflation (a small rise wouldn’t surprise).
Chinese bank lending data, also out on Friday, is forecast to show a smaller rise after the surprise surge in August.
Quietly during last week’s holiday, more Chinese cities revealed crack downs on property lending, a sign the current boom has overheated. The restrictions will slow building activity and that points to weaker commodity prices early next year.
Australia will see the monthly NAB business survey tomorrow and the consumer sentiment survey on Wednesday. Housing finance data is out tomorrow as well from the Bureau of Statistics and that should show an improvement.
The RBA’s six monthly Financial Stability Review on Friday will be watched mostly for more comments about bank cultures and practice, and the state of the housing market.
In the US, the minutes from the Fed’s last meeting are out Wednesday night, our time, and there’s a speech by Fed Chair Janet Yellen on Friday night where she is expected to repeat the message that the Fed will remain gradual in raising rates and expects to hike rates again at its December meeting.
US retail sales and producer price figures are also out this week.
The US third quarter earnings reporting season will also kick off with Alcoa reporting Tuesday night.
The AMP’s Chief Economist, Dr Shane Oliver says “total earnings for S&P 500 companies are expected to be down 1.5% from a year ago, they are expected to be up slightly on the June quarter continuing an earnings recovery that has been helped by a stabilisation in the US dollar and rising trend in the oil price."
And the winner of this year’s Nobel Prize for economics will be announced Monday morning. Last year’s award was awarded to Princeton University’s Angus Deaton, “for his analysis of consumption, poverty and welfare.”
