Market Movers
Euro area inflation data for September are released at 11:00 CET. We expect inflation to turn negative again and forecast a rate of -0.2% y/y in September, down from 0.1% y/y in August mainly due to the latest fall in gasoline prices. We still expect a sharp rise in inflation to 1.1% in January 2016 but this is driven mainly by base effects from energy prices and should be temporary.
US ADP private employment estimate for September is due later in the day. Although this is not one of our preferred labour market indicators, it could attract attention. Consensus looks for a 190,000 gain in private employment (we look for 175K) and a number that deviates markedly from this is likely to move markets.
New York Fed President Dudley will deliver the opening remarks at a conference on financial market liquidity hosted by SIFMA. Later in the day, FOMC Chair Yellen will speak but the topic is community banking and we doubt that there will be any interesting remarks on monetary policy.
Chinese PMI data are released during the night after the US close. The official manufacturing PMI generally has smaller swings and is at a higher level than the Caixin PMI manufacturing. We expect to see a slight decline in the official PMI from 49.7 to 49.5, which would be the lowest level since August 2012. The Caixin service PMI dropped last month to 51.5 and we expect a further drop in September to 51.0 as the weakness in the industrial sector should have some spill-over to service as well.
The Japanese Tankan business survey for Q3 is also released overnight and will in particular be scrutinised for signs of negative spill-over from the recent slowdown in the Chinese economy. With uncertainty on China and a stronger yen weighing on the Japanese business sector, the Tankan survey is expected to show further deterioration.
A wide range of Scandi data are also released today. See Scandi markets, page 2.
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