Starting a busy week, today we are due to get euro flash CPI and US core PCE inflation. We look for euro inflation to rise to 0.5% y/y in October from 0.4% in September, which is in line with consensus. As base effects from commodity prices kick in, we expect euro inflation to reach 1.5% in H1 17 before levelling off again in H2 17. US core PCE inflation is expected to rise 0.2% m/m implying an unchanged annual rate of 1.7% y/y.
For the rest of the week, focus will be on the FOMC meeting (Wednesday), US ISM manufacturing (Tuesday) and US non-farm payrolls (Friday). We do not expect any big changes at the FOMC meeting as it was already quite hawkish in October and the Fed still wants some flexibility to refrain from hiking if circumstances change. On US ISM, we are slightly above consensus, looking for a rise from 51.5 to 52.5 (consensus: 51.7) while we are close to consensus on non-farm payrolls (170,000 versus consensus 175,000). Chinese PMI manufacturing is also up this week (Tuesday) and we estimate a slight decline in October.
In the Scandi region, Norge Bank is due to release the credit indicator today, while wage data for September is due out in Sweden. For the rest of the week, focus will be on PMI data for September.
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