Economic week ahead: China's GDP, EU summit and US earnings
A slew of data from across the world's emerging markets will show how economies from Africa to Latin America are holding up in the face of strong headwinds. Here is your complete preview of the week ahead.
Last month's retail sales figures will kick off a full week of data from the United States on Monday. Analysts surveyed by Bloomberg expect the data to show a 0.7% monthly uptick.
Later in the day, economists surveyed by Dow Jones expect the New York Federal Reserve's manufacturing index to improve to a reading of -4 from -10.41 in September. The New York Fed's index – along with a similar gauge from the Philadelphia Fed – is considered a leading indicator for the national ISM manufacturing index.
On Tuesday, attention will turn to last month's consumer price index and industrial production numbers. Consumer inflation is forecast to show a 0.5% rise. Industrial production is expected to have risen 0.2%.
On Wednesday, America's housing market will take centre stage. Markets expect data to show that builders broke ground on 2% more units in September than in August.
On Thursday, weekly jobless benefits filings are expected to increase to 365 000 from 339 000 in the prior week and the Philadelphia Fed's manufacturing index is expected to rise to 1 from -1.9 in September.
On Friday, September's existing homes sales are expected to fall 1.5% after rising 7.8% in August.
Beyond this week's economic data, investors will keep a keen eye on reports and outlooks from Citigroup, IBM, Coca-Cola, Johnson & Johnson, Intel, Goldman Sachs, Bank of America, American Express, PepsiCo, Microsoft, Google, Morgan Stanley, Philip Morris, General Electric, McDonald's and a host of others as earnings season gets into full swing.
Leaders from the European Union's (EU) 27-member states will gather in Brussels on Thursday for a high profile summit. Greece's progress in debt talks, plans for a common eurozone budget and discussions of a proposed European banking union are expected to dominate the gathering.
In September, EU president Jose Manuel Barroso unveiled plans to establish the European Central Bank (ECB) as the continent's single banking supervisor. The plan was favourably received by financial markets but has met with opposition from some of the currency bloc's member countries – most notably Germany.
In the run-up to Thursday's gathering, markets will be keeping an eye on ongoing talks between Greece and its creditors. The parties are attempting to come to terms on a new set of austerity measures, a precondition for the deeply indebted country to receive its next tranche of loans.
Without the €31.5-billion in external funding on offer, Greece will run out of money by the end of November, officials have said. In an interview published in the Sunday edition of Greece's Kathimerini newspaper, Greek Prime Minister Antonis Samaras said that he expected a deal to be reached before Thursday's summit.
Also this week, markets will be watching treasury auctions in Greece and Spain on Tuesday, in Portugal and Germany on Wednesday and in France and Spain on Thursday. Spain's sale of three, four and 10-year bonds – the first since ratings agency Standard & Poor's downgraded the country's debt rating to one notch above "junk" – will be particularly scrutinised.
China will dominate Asia's economic news this week. Investors around the world are concerned that growth in the world's second largest economy may be slowing further.
Global economic problems – particularly in the United States and Europe – have diminished demand for China's exports. And, despite repeated attempts to encourage domestic consumption, officials have been unable to bolster domestic demand enough to offset reduced export earnings.
As a result, the World Bank recently lowered its projection for China's economic growth in 2012 to 7.7% from 8.2% in May. Confirmation of this pessimism is expected on Thursday when officials release the country's latest growth figures.
Economists expect the data to show that China's annual growth slowed for a seventh straight quarter in the July to September period. Analysts surveyed by Reuters forecast 7.4% year on year growth, down from 7.6% growth in the second quarter and the lowest rate of expansion since the first three months of 2009.
In addition to this data, markets will get a glimpse of the country's performance during September – the first month of the final quarter of 2012 – on Thursday when officials release last month's industrial production, retail sales and urban fixed investment figures.
Markets expect industrial production to have increased 9%, year on year, up from 8.9% growth in August. Retail sales are expected to rise 13.2% and urban fixed investment – a key gauge of the Chinese government's infrastructure spending – is expected to expand by 20.2%. These expected rates are unchanged from those observed in August.
Colombia will feature prominently in this week's news from Latin America. The country's government will begin peace talks with Revolutionary Armed Forces of Columbia (FARC) guerrillas on Monday and hold a joint news conference on Wednesday.
FARC surprised many in Colombia and abroad by announcing in September that it was willing to begin discussions with President Juan Manuel Santos' government. This week's talks are the first in a decade aimed at ending the region's longest armed conflict. The economic stakes are high.
In an interview with Bloomberg News in September, Colombian Finance Minister Mauricio Cardenas said that the country could see 6% to 7% growth "for decades" if a peace deal is struck between the government and the Marxist rebels. The country's economy expanded 4.9% in the second quarter of this year.
Beyond these talks, Colombia will release a number of economic indicators this week. Officials will report tax collections data on Monday and release the country's latest trade figures on Wednesday.
Colombia's trade deficit ballooned in both June and July as import growth far outpaced the value of the country's crude oil and coal exports. Analysts at 4CAST expect the trend to continue in August, forecasting an expansion of the country's trade deficit to $300-million from $214-million in July.
Colombia will release retail sales figures for August on Thursday and industrial production numbers on Friday. Analysts at 4CAST expect the country's retail sales to show 2.5% year on year growth, an improvement on July's lacklustre 1.3% growth.
Global markets will continue to monitor the labour situation in South Africa this week. Recent strike actions brought the rand drop to a more than three year low against the dollar earlier this month and – through diminished trade and remittances – has adversely affected the economies of Botswana, Lesotho, Namibia and Swaziland, all of whom are heavily dependent on the South African economy and currency.
The country's data week will begin on Wednesday with the release of retail trade statistics for August. Markets expect to see 4.6% year on year growth, an improvement on July's 4.2% rise.
On Thursday, South Africa will report August's civil cases for debt, wholesale and motor trade and building statistics. Mineral statistics for July will follow on Friday along with Wesbank's third quarter vehicle market indicator and Ernst & Young's third quarter financial services index.
Nigeria – Africa's second largest economy and largest energy producer – will release consumer price index, private sector credit, money supply and foreign trade data this week.
Elsewhere in Africa, Ghana will announce its benchmark inflation rate and release gross reserves data. Tanzania will report CPI. Egypt will report its trade balance on Thursday and Uganda will report foreign reserves on Friday.
Beyond these data releases, Angola's President, Eduardo dos Santos, will deliver his state of the union address on Monday, the Infrastructure Partnership for African Development conference will kick off in the Democratic Republic of Congo on Tuesday and Tanzania's oil and gas conference will get underway on Thursday.
Matt Quigley writes a weekly economic preview for the Mail & Guardian Online. You can follow him on Twitter.