Monday Oct 7 2019 12:15
4 min
The US and China are due to restart high-level trade talks on Thursday (Oct 10th) as the two sides try to hammer out an agreement on reducing tariffs. Failure to reach agreement will likely mean an escalation in tariffs and may spark fears in the market of a greater slowdown in economic activity. The White House delayed imposing tariffs on a large chunk of Chinese imports from Oct 1st until Oct 15th, whilst a range of goods have been exempted until Dec 15th. At the very least market watchers will be eyeing whether these delays can be extended, or the tariffs even scrapped. However, hopes for a comprehensive deal on trade remain low at this stage.
The last three readings of the core CPI have shown a steady march higher in inflation, raising the prospect that the Fed could have to walk back on its rate cut ambitions should higher inflation take hold. In the 12 months through August, the core CPI increased 2.4%, the most since July 2018, after climbing 2.2% in July.
We cannot take our eyes off the political developments in the UK as the deadline for Brexit approaches on October. In the next few days we should expect MPs, the government and the EU do a merry dance as the clock ticks down to the key European Council meeting on Oct 17th. Uncertainty is the only certainty and the pound will remain highly exposed to headline risk.
The monthly UK GDP figures will be closely watched in the wake of the soft PMI readings last week, which showed that the economy is close to recession. Markets increasingly think that whatever the outcome on Brexit, the Bank of England will have to cut rates before it thinks about hiking.
Earnings season make be over, but there are still a few companies publishing. Make a note of these dates:
| Oct 8th | Levi Strauss | Q3 |
| Oct 8th | YUM! Brands Inc | Q3 |
| Oct 9th | GVC Holdings | Q3 |
There’s a lot going on this week, and we discuss the headlines in our XRay videos. Watch live or catch-up at a convenient time.
Don’t forget to email xray@markets.com any questions you have and our hosts will try to answer them.
| 07.15 GMT | Oct 7th | European Morning Call |
| 15.00 GMT | Oct 7th | Charmer Trading talks Forex |
| 15.45 GMT | Oct 8th | Asset of the Day: Oil Outlook |
| 13.00 GMT | Oct 9th | Asset of the Day: Indices Insights |
| 12.30 GMT | Oct 10th | US CPI LIVE |
| 18.00 GMT | Oct 10th | The Stop Hunter’s Guide to Technical Analysis (Part 6) |
There are quite a lot of data published this week. Here are the top events to put in your diary.
| 07.30 GMT | Oct 7th | UK Halifax House Price Index |
| 08.30 GMT | Oct 7th | EZ Sentix Investor Confidence |
| 00.30 GMT | Oct 8th | NAB Business Confidence (Australia) |
| Tentative | Oct 8th | China Trade Balance |
| 12.30 GMT | Oct 8th | US Core PPI |
| 00.30 GMT | Oct 9th | Australia Westpac Consumer Sentiment |
| 14.30 GMT | Oct 9th | EIA Crude Oil Inventories |
| 18.00 GMT | Oct 9th | FOMC Meeting Minutes |
| 08.30 GMT | Oct 10th | UK GDP |
| 12.30 GMT | Oct 10th | US CPI Inflation |
| 12.30 GMT | Oct 11th | Canada Employment Change |
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