Week Ahead Economic Preview: Week of 13 November 2023

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US and UK inflation, China activity data and Japan's GDP in focus

Key inflation releases from the US and UK are anticipated in the coming week, in addition to industrial production and retail sales data for the former. Industrial production readings will also be due across the eurozone and mainland China, as well as third quarter GDP updates from both the Eurozone and Japan. A central bank meeting also takes place in the Philippines. Finally, Global Business Outlook surveys released on Monday by S&P Global Market Intelligence will provide forward-looking insights on all major economies.

October's US CPI will be the most important piece of economic data due in the new week. This comes as market sentiment improved significantly over the last 30 days amid hopes for peak rates, according to the latest S&P Global Investment Manager Index (IMI). Concerns with regards to central bank policy have eased markedly, fuelled partly by less hawkish comments coming through from US central bankers. Whether further progress was made in the fight against inflation will be assessed with the US CPI release. As far as PMI price data have alluded to, further easing of inflationary pressures is to be expected. Other activity data from the US including industrial production and retail sales will also be key in helping assess the degree to which the US economy is retaining growth momentum in the fourth quarter.

Over in the UK, a flurry of economic releases including inflation, employment and retail sales data are to be expected. Developments on the inflation front will be especially closely watched as there is a widespread expectation that the annual CPI rate will fall sharply from its current 6.7%. At the same time, however, we are mindful of employment conditions continuing to soften in October, according to PMI and recruitment survey indications. Official UK employment data will be due Tuesday, though concerns persist over data quality.

Finally, in APAC, Q3 GDP will be watched from Japan after growth was shown to have peaked earlier in Q2 and have further moderated into the start of the fourth quarter, partly in response to the knock-on effect of slower demand from China. Mainland China's industrial production and retail sales data will therefore also be eagerly assessed given the importance of the economy for regional growth.

Global inflation pressures at lowest since 2020

UK inflation is widely expected to have dropped sharply in October, having been stuck at an annual rate of 6.7% over the prior two months, and US inflation is also expected to have cooled from a monthly rate of 0.4% to 0.1%. These softening inflation rates have been trailed in advance by the PMI surveys, which showed lobal inflationary pressures moderating in October to their lowest since late-2020.

Although the overall PMI's rate of inflation of selling prices for goods and services remains above its pre-pandemic average, amid some stickiness of services inflation and a modest upturn in goods prices, there is encouraging news on underlying - or core - price pressures cooling further in the coming months. In particular, survey responses reveal wage pressures to have moderated markedly in recent months. Companies' pricing power has also been hit by reduced demand. The survey data show demand-pull price pressures are reverting to their long-run average (or 'normal' levels).

The national survey data in fact show central bank inflation targets having now consequently come into view in the US and eurozone. Some price stickiness is more evident in the UK, though even here the rate of inflation looks set to moderate sharply in the coming months.

Read more in our special report on global inflation.

Key diary events

Monday 13 Nov
Singapore, Malaysia Market Holiday
Japan PPI and Machine Tool Orders (Oct)
Turkey Current Account (Sep)
India Inflation (Oct)
Germany Current Account (Sep)
United Kingdom Regional PMI* (Oct)
United States Consumer Inflation Expectations (Oct)
Global Business Outlook* (Oct)

Tuesday 14 Nov
India Market Holiday
New Zealand Food Inflation (Oct)
Australia Westpac Consumer Confidence (Nov)
Australia NAB Business Confidence (Oct)
India WPI (Oct)
United Kingdom Labour Market Report (Sep)
South Africa Unemployment (Q3)
Eurozone Employment Change (Q3, prelim)
Eurozone GDP (Q3, 2nd est.)
Eurozone ZEW Economic Sentiment Index (Nov)
Germany ZEW Economic Sentiment Index (Nov)
United States CPI (Oct)

Wednesday 15 Nov
Brazil Market Holiday
Japan GDP (Q3, prelim)
South Korea Trade (Oct)
Australia Wage Price Index (Q3)
China (Mainland) Industrial Production, Retail Sales, Fixed Asset Investments (Oct)
China (Mainland) Unemployment Rate (Oct)
China (Mainland) 1-Year MLF Announcement
Indonesia Trade (Oct)
Japan Industrial Production (Sep, final)
Germany Wholesale Prices (Oct)
United Kingdom Inflation (Oct)
Eurozone Industrial Production (Sep)
Eurozone Balance of Trade (Sep)
United States PPI (Oct)
United States Retail Sales (Oct)
United States Business Inventories (Sep)

Thursday 16 Nov
Japan Trade (Oct)
Japan Machinery Orders (Sep)
Australia Employment (Oct)
China (Mainland) House Price Index (Oct)
Philippines BSP Interest Rate Decision
United States Industrial Production (Oct)

Friday 17 Nov
Singapore Non-oil Domestic Exports (Oct)
Malaysia GDP (Q3)
United Kingdom Retail Sales (Oct)
Eurozone Inflation (Oct, final)
United States Building Permits (Oct, prelim)

* Access press releases of indices produced by S&P Global and relevant sponsors here.

What to watch

Americas: US CPI, PPI, retail sales, industrial production and building permits figures

US CPI and PPI figures will be closely watched in the coming week for assessment of the Fed's ongoing fight with inflation. According to consensus, October's headline CPI is expected to slow from September's 0.4% month-on-month (m/m) print while core CPI may show some signs of stickiness around 0.3% m/m. S&P Global US PMI selling price index, which preludes the trend for official CPI, further fell at the start of October, reinforcing the consensus for the lowering of inflationary pressures.

Additionally, US retail sales and industrial production figures will be closely watched for insights into economic conditions in October. Focusing on the goods producing sector, a stabilisation of manufacturing conditions was observed with October's S&P Global US Manufacturing PMI as new orders returned to growth. The retail sales data will be meanwhile eyed for indications as to whether consumers will again help support the economy in the fourth quarter after the upside surprise to Q3 economic growth. US building permits data will likewise be in focus, helping further assess fourth quarter GDP trends. Our US economics team is currently anticipating annualised growth to slow from near 5% in Q3 to just above 1% in Q4, in line with our PMI.

EMEA: UK CPI, job market and retail sales data, Eurozone Q3 GDP, industrial production, German ZEW

UK retail sales and inflation data will provide important insights for Bank of England rate setters, though the labour market release will be less useful due to concerns over data quality. A marked easing of price pressures is expected in the UK, which should play into the hands of those voting to hold rates steady at the last two MPC meetings.

An update of eurozone's Q3 GDP (currently signalling a 0.1% decline) will also be due alongside industrial production numbers, the latter likely to disappoint after a steep drop in data for Germany.

APAC: Japan Q3 GDP, BSP meeting, China industrial production and retail sales data

In APAC, a central bank meeting in the Philippines unfolds on Thursday. Data highlights meanwhile include Q3 GDP from Japan while industrial production and industrial sales figures from mainland China will be in focus. A Reuters poll shows Japan's GDP is expected to have contracted in Q3, though PMI data have recently been more resilient.

Special reports

Worldwide Business Activity Stalls in October as Global PMI Hits 50.0 - Chris Williamson

Singapore's Economic Growth Improves in Third Quarter of 2023 - Rajiv Biswas

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