Tokyo markets and the US cash Treasury market are shut Monday, thinning liquidity at the start of a week built around US September CPI on Wednesday. Big bank earnings and Fed Chair Kevin Warsh's final scheduled appearance before the October FOMC meeting follow.
Japan is closed Monday for Sports Day, leaving Tokyo's equity and bond markets shut. The US observes Columbus Day, so equities trade while the federal debt market stays closed. The closures leave Asian liquidity thin at the start of a week that builds toward a US inflation report.
Banks report ahead of CPI
The calendar shifts to the US on Tuesday, when JPMorgan Chase, Goldman Sachs, Wells Fargo, Citigroup, UnitedHealth Group and Johnson & Johnson report before the open. The results offer an early view on credit conditions and lending demand after the Fed's September rate rise. Bank of America, Morgan Stanley and BlackRock follow on Wednesday, alongside ASML.
September CPI lands Wednesday at 12:30 GMT (8:30 ET), the latest inflation reading before the FOMC meeting on October 28. Thursday brings September producer prices and advance retail sales, both at 8:30 ET.
August baseline points to energy
The August report set the baseline: headline prices rose 0.4% on the month after 0.1% in July, with gasoline accounting for more than a third of the increase. Core prices rose 0.3%. Annually, headline inflation held at 3.4% and core eased to 2.4%, with energy up about 16% over the year.
For September, forecasts point to energy pushing the headline higher again. One forecaster expects a 0.6% monthly rise that would lift the annual rate to roughly 3.7%. A broad consensus had not yet been published.
Warsh speaks before the blackout
Warsh then gets the final word. He is due to join a moderated conversation at the IMF and World Bank Annual Meetings in Bangkok around 04:30 GMT on Friday, described as a public appearance before the blackout period ahead of the October 27-28 FOMC meeting.
Since taking office, Warsh has sought to change how the Fed communicates, moving away from forward guidance while stressing its commitment to price stability. Markets will therefore look to his tone rather than any signal on timing.
A hot print driven by fuel costs would leave Warsh weighing an energy shock against still-moderate underlying inflation.
Source: Investinglive
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