The week of October 21-25, 2024, brings a series of high-impact economic events and key company earnings reports. Central banks and economic indicators from Canada, Europe, the UK, and the US will provide critical insights into inflation, manufacturing, and services sector trends. Notable events include the Bank of Canada’s overnight rate decision, as well as flash PMI reports from Europe, the UK, and the US. Additionally, major earnings releases from companies like General Electric, General Motors, Coca-Cola, and Tesla are set to influence market sentiment and investor strategies.
Wednesday 16:45 (GMT+3) – Canada: Overnight Rate (CAD)
Thursday 11:00 am (GMT+3) – Europe: Flash Manufacturing PMI (EUR)
Thursday 11:00 am (GMT+3) – Europe: Flash Services PMI (EUR)
Thursday 11:30 am (GMT+3) – UK: Flash Manufacturing PMI (GBP)
Thursday 11:30 am (GMT+3) – UK: Flash Services PMI (GBP)
Thursday 16:45 (GMT+3) – USA: Flash Manufacturing PMI (USD)
Thursday 16:45 (GMT+3) – USA: Flash Services PMI (USD)
Friday 15:30 (GMT+3) – Canada: Retail Sales m/m (CAD)
16:45 – Canada: Overnight Rate (CAD)
The Bank of Canada uses the target for the overnight rate, also known as the policy interest rate, to control inflation. This rate influences other interest rates in the economy, affecting loans, mortgages, and savings. The Bank adjusts this rate to either stimulate economic growth by lowering it (encouraging spending) or to curb inflation by raising it (encouraging savings). The target rate is part of the Bank’s broader strategy to maintain economic stability.
The Bank of Canada announced on September 4, 2024, that it reduced its target overnight rate to 4.25%, with the Bank Rate at 4.5% and the deposit rate at 4.25%, while continuing its balance sheet normalization.
Economists expect that BOC will reduce the overnight rate to 3.75%.
11:00 am – Europe: Flash Manufacturing PMI (EUR)
The Manufacturing PMI is a monthly survey of US manufacturing activity. It includes a composite index that indicates sector expansion if above 50% and contraction if below. The report tracks changes in key indicators like New Orders, Production, and Employment, offering insights into the manufacturing sector’s health and the broader economy.
In September, eurozone business activity declined, led by manufacturing’s continued contraction. New orders fell sharply, confidence hit a 10-month low, and workforce cuts persisted. Services saw slight growth, while France and Germany faced contractions, with modest growth elsewhere.
Economists are forecasting a contractionary figure of 45.1, indicating a further slowdown in economic activity.
11:00 am – Europe: Flash Services PMI (EUR)
The Services Purchasing Managers’ Index (PMI) is an economic indicator that measures the performance of the services sector. It is based on surveys of business executives in industries such as finance, healthcare, retail, and other service-oriented areas. The index reflects changes in key variables such as new business, employment, prices, and output. A PMI reading above 50 indicates expansion in the services sector, while a reading below 50 signals contraction. It is a critical gauge for assessing economic health and guiding monetary policy decisions.
In September, the eurozone private sector saw its first decline in business activity in seven months, driven by sharp drops in new orders and manufacturing output. Services growth was minimal, the weakest since February. France returned to contraction, and Germany saw its steepest decline since February, while the rest of the eurozone experienced modest growth.
Economists forecast a growth figure of 51.5, indicating a modest expansion in economic activity.
11:30 am (GMT+3) – UK: Flash Manufacturing PMI (GBP)
In September, the UK Manufacturing PMI fell to 51.5, its lowest in three months, signaling slower growth in the manufacturing sector. While private sector activity continued to rise, overall growth slowed, driven by weaker manufacturing and services. Input cost inflation increased, mainly due to higher wages and shipping costs, but prices charged rose at the slowest rate since February 2021.
Analysts expect a reading of 51.5.
11:30 am (GMT+3) – UK: Flash Services PMI (GBP)
In September, the UK’s Services PMI fell to 52.8 from 53.7 in August, signaling slower growth in the services sector. Despite the slowdown, business activity expanded for the 11th consecutive month. Inflationary pressures eased, with prices rising at their slowest pace since February 2021. However, concerns about fiscal policy ahead of the Autumn Budget and global demand weighed on optimism.
Economists anticipate a growth figure of 52.3.
16:45 – USA: Flash Manufacturing PMI (USD)
The Manufacturing PMI is a monthly survey of US manufacturing activity. It includes a composite index that indicates sector expansion if above 50% and contraction if below. The report tracks changes in key indicators like New Orders, Production, and Employment, offering insights into the manufacturing sector’s health and the broader economy.
The S&P Global Flash US Manufacturing PMI fell to 47.0 in September, indicating a worsening in business conditions for the third consecutive month and the steepest decline since June 2023. New orders dropped sharply, employment fell at the fastest rate since June 2020, and supplier delivery times improved, signaling spare capacity. Production slowed but showed some improvement compared to August.
Economists project a contractionary reading of 47.5.
16:45 – USA: Flash Services PMI (USD)
The ISM Services PMI measures activity in the US service sector for the reporting month. It is derived from a survey of supply executives in the services sector. Readings above 50 can have a positive effect on US dollar quotes.
In September, the US Services PMI recorded a reading of 55.4, indicating continued growth, though slightly down from 55.7 in August. Service sector expansion remained strong, but manufacturing declined. Business confidence dropped, and prices rose at the fastest rate in six months, driven by higher input costs, especially wages.
Economists project a reading of 55.0.
15:30 – Canada: Retail Sales m/m (CAD)
Canada Retail Sales show changes in the value of goods sold in retail stores in the specified month compared to the previous month. The indicator is calculated based on statistics from several thousand retail stores, and the data is then extrapolated to the whole country.
The indicator evaluates consumer activity and inflation. The indicator growth can have a positive effect on CAD quotes.
Retail sales grew 0.9% to $66.4 billion in July, driven by motor vehicle and parts dealers. Core retail sales rose 0.6%, and total sales volume increased by 1.0%. Sales increased in seven of nine subsectors and eight provinces. E-commerce sales were up 3.4%, making up 6.1% of total retail trade. An early estimate indicates a 0.5% sales rise in August.
Economists expect a modest increase of 0.2%.
Tuesday, October 22: GE (General Electric)
Tuesday, October 22: GM (General Motors)
Wednesday, October 23, KO (The Coca-Cola Company)
Wednesday, October 23, TSLA (Tesla, Inc.)
In conclusion, the week of October 21-25, 2024, will be critical for both economic indicators and corporate earnings, providing key insights into global markets. With important central bank decisions, flash PMI data, and company earnings reports from major players like General Electric, General Motors, Coca-Cola, and Tesla, investors and analysts will closely monitor these events to gauge economic health and market direction. The results from these indicators and earnings will likely shape market sentiment and influence future monetary policy decisions across major economies.