Economic wrap: FOMC decision and NFP all coming up - Westpac
Analysts at Westpac offered an economic wrap.
Key Quotes:
"US manufacturing PMI (ISM) rose from 51.5 to 51.9 in Oct (vs 51.7 expected). The Markit version was finalised higher at 53.4 (vs 53.2 expected). A recovery in mining and factory output, plus a smaller inventory overhang, is helping; although sluggish world growth remains a headwind. Construction spending fell 0.4% in Sep (vs +0.5% expected), although the details were upbeat. Small business sentiment (IBD) rose to 51.4 (vs 49.0 expected).
The GDT dairy auction delivered a large positive surprise. Whole milk powder rose 20%, against futures predictions of +10%. Reduced auction supply has been well flagged by Fonterra for many weeks, suggesting exuberant demand may have been at play last night.
Economic Event Risks Today
We expect NZ unemployment for Q3 to fall from 5.1% to 5.0%, with the median estimate unchanged at 5.1%. The report is expected to reflect solid economic activity, but note that this series has been erratic in the past and subject to later revisions. Also out in NZ is the important RBNZ inflation expectations survey (2yr ahead measure), which we expect to remain stuck at below 1.7%.
Australian dwelling approvals: the near term outlook depends on the highly uncertain high rise component. We expect a 2.5% fall in Sep.
The week’s highlight, the FOMC decision, should see the Fed remain on the sidelines but to again signal intent for Dec. ADP (private sector) payrolls is also due ahead of the main payrolls report on Friday. Both should show robust gains for employment."
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
