As we dive into a busy week for global markets, all eyes will be on a wave of economic data and central bank decisions. Major events include fiscal policy announcements from China, and significant updates from key economies such as the Eurozone, UK, Japan, and the US. Here’s a breakdown of what to watch.

China’s Fiscal Policy Focus

Mainland China’s financial focus shifts to the weekend, with a crucial press conference from the finance ministry expected to outline “intensifying countercyclical” adjustments to fiscal policy. This announcement could shape the outlook for China’s economy in the coming quarters and ripple through global markets. HSBC analysts suggest the size and impact of these measures could be pivotal, particularly as the Chinese economy continues to battle post-pandemic challenges.

Key Central Bank Decisions

European Central Bank (ECB)

The ECB is poised to cut interest rates for a second consecutive time at its Thursday meeting. ECB President Christine Lagarde will be at the forefront, with analysts anticipating a 25bps rate cut, which would bring the policy rate to 3.25%. JP Morgan analysts note that while the ECB will likely maintain its data-dependent, meeting-by-meeting approach, this move would still signal a restrictive policy stance.

Turkey

On Thursday, the Turkish Central Bank is expected to hold rates steady at 50%, following a hawkish stance on inflation. September saw inflation reaccelerate to 3.0% month-on-month, outpacing market expectations. UBS believes this will keep the CBRT on its current path for now.

Monday, October 14

• China Trade Balance (Sep): Data for China’s trade balance is expected to show a figure around $90.75 billion, slightly lower than the previous month’s $91.02 billion. HSBC analysts suggest a slowdown in export growth, propped up by base effects, while import growth will likely remain weak at just 0.8%.

Tuesday, October 15

• UK Labour Force Survey (Aug): The UK’s labor data may show an uptick in the unemployment rate to 4.2%. Pay growth will also be scrutinized, with markets focused on signs of declining momentum in private sector wage growth.
• Germany ZEW Survey (Oct): The ZEW expectations survey is likely to reflect ongoing economic challenges in Germany, though investor sentiment is expected to be less gloomy than in September.
• Canada CPI (Sep): Canada’s inflation rate is projected to come in at 1.8%, down from 2.0% the previous month, while core inflation is expected to hold steady at 2.3%.
• New Zealand CPI (Q3): New Zealand inflation is forecast to accelerate to 0.7% quarter-on-quarter, driven by food price increases and housing costs.

Wednesday, October 16

• UK CPI (Sep): Inflation in the UK is expected to ease, with headline CPI forecast at 1.9% year-on-year, down from 2.2%. Core inflation is also expected to drop slightly to 3.4%. Markets will be particularly focused on how services inflation and fuel prices contribute to the overall number.
• Japan Trade Balance (Sep): Japan’s trade deficit is expected to persist, with exports holding firm, particularly in the auto sector. Imports are also likely to rise due to higher oil prices.

Thursday, October 17

• Australia Labour Force Report (Sep): Employment growth has been strong, but rising participation and population growth mean the unemployment rate may tick higher to 4.3%.
• US Retail Sales (Sep): US retail sales are expected to show a modest 0.3% monthly increase, driven by stronger auto sales. However, falling gasoline sales are likely to weigh on the overall figure.

Friday, October 18

• China Q3 GDP: China’s Q3 GDP is expected to grow by 1.1% quarter-on-quarter, with year-on-year growth at 4.7%. Industrial production and retail sales data, also released the same day, will provide further insight into the state of the Chinese economy.
• UK Retail Sales (Sep): Retail sales are expected to drop by 0.5% month-on-month, although Q3 as a whole has seen a notable 2% increase in consumer spending.

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As central banks maintain their close watch on inflation and growth, this week will offer plenty of data points and policy decisions to drive market movements. Keep an eye on China’s fiscal policy over the weekend and ECB’s rate cut as major market movers.