There are only a few interesting releases on the economic calendar today.
First off, there were a couple of reports from Japan for the month of September. Bank lending was in line with the forecast, as was the MoM PPI, but the yearly PPI was actually better than expected at 6.3%.
The United Kingdom published a couple of labor market reports, of which the most important one was a disappointing employment change reading for July of 235K, versus a forecast of 243K.
Still, the overall response to the UK employment data has been positive, as unemployment is going down and wages are going up. Inflation is also soaring around 4%, well above the golden standard of 2%. Thus, the Bank of England might have to increase interest rates sooner rather than later, maybe even before the Federal Reserve gets to do it. This is strengthening the British pound’s positions against other major currencies.
In the European Union, Germany disappointed investors with two sub-par ZEW economic surveys for October, which indicate a slowdown in the bloc’s strongest economy.
The eurozone-wide ZEW report was lower than the previous month, but more or less in line with investors’ expectations. Furthermore, there will be a couple of speeches by members of the European Central Bank, but again, nothing major.
Later today, Clarida and Bostic of the Federal Reserve will also speak in the United States, in what would be the first Fed comments since the publication of September’s disappointing non-farming payrolls data.
There will also be a report on August job openings in the US today, which is going to complement last week’s labor market data.
In the current pessimistic market situation, US stock indices will trade lower today. The third-quarter earnings season is about to begin, which usually leads to very small movements in stocks, but the current situation is making it even more difficult for indices to rally.
In China, the development sector continues to cause trouble. Evergrande Group has now missed a number of payments, but other construction companies are beginning to join it. These include Fantasia, Sinic, and Xinyuan, who are all going to miss payment deadlines on liabilities.
