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Week Ahead Economic Preview: Week Of 12 October 2020

Published 09/10/2020, 05:54
Updated 05/03/2021, 15:50
  • US industrial production and retail sales data
  • Eurozone manufacturing and UK jobs numbers
  • China data, APAC regional trade figures and Asian monetary policy meetings
  • IMF World Economic Outlook
  • Second US presidential debate?
  • Markets will be steered by Covid-19 infection rates and whether fresh data will show a resurgent impact of the pandemic on the global economy, while also eyeing the politics and stimulus talks in the run up to the ever-closer US presidential election.

    With virus infection rates rising in many countries in recent weeks, it was no surprise to see the pace of global economic growth lose a little momentum in September, according to the worldwide PMI surveys. Although the overall pace of growth remained relatively solid, thanks mainly to a strong manufacturing performance and rising investment spending, detailed sector data showed consumer service industries remaining in a steep downturn, with some countries even sliding back into contraction as virus fighting restrictions were ramped up again. We consequently expect to see the IMF grow gloomier when the World Economic Outlook report is updated in the coming week to show a slower economic recovery, with warnings of the potential for increased longer-term damage to many economies.

    In the US, the economic data will be especially keenly eyed in the lead up to the polls, with analysts eager to see updates to industrial production and retail sales to gauge whether the recovery is losing steam. Trump and Biden were meanwhile scheduled to go head to head again in the second presidential debate, though the clash is looking increasingly unlikely.

    In Europe, industrial production and trade figures for August data will be important steers for understanding the likely size of a eurozone GDP rebound in the third quarter, while in the UK jobs data will be closely watched for signs of rising unemployment as the government's furlough scheme is unwound.

    In Asia, China watchers will assess vehicle sales, credit and money supply data to hopefully confirm the sustained pace of economic recovery, while central bank meetings will be held in South Korea, Indonesia and Singapore.

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