Week Ahead: Economic Indicators 20th – 24th October (US)

Monday 20th October
No noteworthy economic releases

Tuesday 21st October
08:30 ET
Canadian CPI for September
The Consumer Price Index (CPI) measures the average change over time in prices paid by consumers for a basket of goods and services, including food, shelter, transportation, and recreation. It is a key gauge of inflation and informs Bank of Canada policy.

Summary of Last Report (August)
Headline CPI: +1.9% YoY, up from 1.7% in July.
Monthly Change: −0.1% MoM, following +0.3% in July.
Core Inflation: CPI-median at 3.1%, CPI-trim at 3.0%.
Key Drivers: Gasoline prices −12.7% YoY.
Food prices +3.5% YoY (notably meat).
Shelter +2.6% YoY.
Transportation −0.5% YoY.
Underlying Inflation (excluding gasoline): +2.4% YoY.
Regional Variations: PEI +1.1%, Whitehorse +3.1%, Newfoundland & Labrador +1.3%.

What to Expect
Canadian Stocks
Higher-than-expected CPI could weigh on equities, particularly consumer-facing sectors, as investors anticipate slower spending.
Lower-than-expected CPI may support stocks, as inflation pressures ease and margins remain stable.
Canadian Dollar (CAD)
Strong CPI may strengthen CAD, as it could signal the Bank of Canada might maintain or tighten policy.
Weak CPI may weaken CAD, reflecting expectations for more dovish or accommodative policy.
Government of Canada Bonds
Strong inflation prints could push yields higher (prices lower) as investors anticipate tighter policy.
Soft inflation may lead to lower yields (prices up), as demand for safe-haven bonds rises and rate hikes become less likely.
Bank of Canada Policy
Higher-than-expected CPI may prompt the BoC to maintain or tighten interest rates to control inflation.
Lower-than-expected CPI could encourage a more dovish stance, possibly delaying rate hikes or even considering easing if economic momentum falters.

Wednesday 22nd October
10:30 ET
US Weekly EIA Crude Oil Inventories
The EIA Weekly Crude Oil Inventories report, released by the U.S. Energy Information Administration (EIA), measures changes in U.S. commercial crude oil stocks, excluding the Strategic Petroleum Reserve. The report also tracks gasoline and distillate inventories. It is a key indicator of supply and demand balance in energy markets, often moving oil prices and energy stocks.

What to Expect
Oil Prices
Larger-than-expected draws in inventories generally support oil prices, indicating tighter supply or stronger demand.
Builds or smaller-than-expected draws may weigh on prices, suggesting softer demand or oversupply.
Energy Stocks
Energy equities tend to rise if inventories draw more than expected, reflecting potential margin and pricing improvements.
Inventory builds or weaker draws may put downward pressure on energy stocks.

Thursday 23rd October
08:30 ET
US Weekly Initial & Continued Jobless Claims
Initial Jobless Claims: The number of new claims for unemployment benefits filed by individuals who have lost their jobs. This metric serves as an indicator of the pace of layoffs and the health of the labor market.
Continued (or Insured) Unemployment Claims: The number of individuals who continue to receive unemployment benefits after an initial claim. This figure reflects the number of people who remain unemployed and actively seeking work.

What to Expect
US Stocks
Positive Impact: A decrease in jobless claims suggests a resilient labor market, potentially boosting investor confidence and supporting equity markets.
US Dollar
Strengthening: Lower jobless claims can signal economic stability, which may lead to a stronger U.S. dollar as investors seek assets in a robust economy.
Government Bonds Yields
A strong labor market may lead to higher yields (lower bond prices) as expectations for economic growth rise, potentially prompting the Federal Reserve to adjust interest rates.
Federal Reserve Policy
Policy Outlook: The Federal Reserve may view the decline in jobless claims as a sign of economic strength, influencing their decisions on interest rates and monetary policy.

Friday 24th October
09:45 ET
US S&P Manufacturing & Services PMI October Prelim
Manufacturing PMI: A composite index based on surveys of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion, while below 50 indicates contraction.
Services PMI: An index derived from surveys of service sector executives, reflecting the economic health of the services industry. A reading above 50 suggests growth, below 50 indicates contraction.

What to Expect
US Stocks
Potential Decline: The slowdown in both manufacturing and services sectors may lead to reduced investor confidence, potentially impacting stock market performance.
US Dollar
Possible Weakening: Moderated economic growth could diminish expectations for aggressive interest rate hikes, possibly leading to a softer U.S. dollar.
Government Bonds
Yield Pressure: Slower economic activity might increase demand for government bonds as a safe haven, potentially lowering yields.
Federal Reserve Policy
Cautious Approach: The Federal Reserve may adopt a more dovish stance, considering further rate cuts to support economic growth amid signs of a cooling economy.

10:00 ET
University of Michigan Sentiment Survey & Inflation Expectations October Final
Consumer Sentiment Index: A monthly survey that gauges U.S. consumer attitudes toward the economy, including personal finances, business conditions, and buying intentions. A reading above 50 indicates optimism, while below 50 suggests pessimism.
Inflation Expectations: The anticipated rate of inflation over the next year and five years, as perceived by consumers. These expectations influence consumer behavior and can impact economic policy decisions.

What to Expect
US Stocks
The decline in consumer sentiment may lead to increased market volatility, potentially affecting investor confidence and stock prices.
US Dollar
Elevated inflation expectations could influence the Federal Reserve’s monetary policy, impacting the value of the U.S. dollar.
Government Bonds
Rising long-term inflation expectations may lead to higher yields as investors demand greater returns to offset anticipated inflation.
Federal Reserve Policy
Persistent inflation concerns and declining consumer sentiment may prompt the Federal Reserve to reassess its monetary policy stance, potentially influencing interest rates.