Key Event This Week: Geopolitics, Retail Sales, Housing, And Who Is The Next Fed Head

After a fast and furious week in earnings, economic news and central bank developments, it’s a quieter week ahead in terms of the calendar, though market attention will continue to focus on the question of who might be appointed as the next Fed Chair, as well as the latest inflation statistics from a number of countries, including the UK (Wednesday). As DB’s Jim Reid summarizes, there is a reasonable amount of Fedspeak so it’ll be especially interesting to hear those on the transitory side to see if last week’s shocking print has impacting their thinking. Otherwise, geopolitics will be in focus, with today’s virtual meeting between US President Biden and Chinese President Xi, alongside continued speculation about whether the UK might trigger Article 16 of the Northern Ireland Protocol even if tensions have eased a touch in the last few days.

Starting with today’s virtual meeting between President Biden and President Xi, it is set to take place at 7:45 PM Washington time (well past Joe’s bedtime), which will be 8:45 AM on Tuesday in Beijing. While both the presidents spoke over the phone twice this year, this is the first time it is being dubbed as a summit. There is some thought that tariff reductions could be on the agenda, especially given current US inflation levels but it might be a bit early for that in any relationship rebuild. We’ll know more in time for tomorrow’s EMR.

Moving onto the rest of the week, there are a few decisions from EM central banks over the week ahead, including Turkey, South Africa and Indonesia (all Thursday). However, the main focus for investors will be the speculation about who might be the next Fed Chair, particularly in light of the news out last week that both incumbent Fed Chair Powell and Governor Brainard had been interviewed for the position. Powell’s current four-year term comes to an end in February, and whoever’s nominated would require senate confirmation for another term. At this point 4, 8 and 12 years ago, the announcement of who’d be nominated had already been made, but we still don’t have a date for when we might get the news. However, it may not be too far away, with President Biden saying in Glasgow on November 2 that it would be “fairly quickly”.

On the data side, there’ll be an increasing amount of hard data out of the US for October, including retail sales, industrial production (both Tuesday) and housing starts (Wednesday). Meanwhile, there’ll also be some important UK data as the Bank of England mulls over their monetary policy settings ahead of their meeting next month. On Tuesday, there’s the latest employment report, and then on Wednesday, we’ll get the latest CPI reading for October.

Turning to politics, it’s worth keeping an eye out for any developments on Brexit, with speculation rising that the UK government could trigger Article 16 of the Northern Ireland Protocol. Over the last 3 or 4 days the mood music has moved a little towards compromise so we’ll see if this gathers some momentum.

Lastly on the earnings front, it’s the tail end of the season now, but there are still a few major companies left to report. Tomorrow we’ll hear from Walmart and Home Depot, before Wednesday brings reports from Nvidia, Cisco, Lowe’s and Target. Then on Thursday, we’ll hear from Intuit, Applied Materials and TJX.

Courtesy of DB, here is a day-by-day calendar of events

Monday November 15

• Data: China October retail sales, industrial production, US November Empire State manufacturing survey
• Central Banks: BoE’s Haskel speaks

Tuesday November 16

• Data: Japan tertiary industry index, UK September unemployment, Euro Area second Q3 GDP estimate, US October retail sales, industrial production, capacity utilisation, November NAHB housing market index, Japan September core machine orders (23:50 UK time)
• Central Banks: Fed’s Barkin, Bostic, George and Daly speak
• Earnings: Walmart, Home Depot

Wednesday November 17

• Data: UK October CPI, US October housing starts, building permits, Canada October CPI
• Central Banks: Fed’s Bowman, Mester, Waller, Daly, Evans and Bostic speak
• Earnings: Nvidia, Cisco, Lowe’s, Target

Thursday November 18

• Data: US weekly initial jobless claims, October Conference Board leading index, November Philadelphia Fed business outlook, Kansas City Fed manufacturing activity, Japan October nationwide CPI (23:30 UK time)
• Central Banks: Monetary policy decisions from Bank Indonesia, the Central Bank of Turkey and the South African Reserve Bank, ECB’s Centeno, and Fed’s Bostic, Evans and Daly speak
• Earnings: Intuit, Applied Materials, TJX

Friday November 19

• Data: UK November GfK consumer confidence, October retail sales, Germany October PPI
• Central Banks: Fed Vice Chair Clarida, Fed’s Waller and BoE’s Pill speak

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Finally, here is Goldman with a focus just on the US, where the key economic data releases this week are the retail sales report on Tuesday and the Philadelphia Fed manufacturing index on Thursday. There are several scheduled speaking engagements from Fed officials this week, including a speech by Vice-Chair Clarida on global monetary policy coordination on Friday.

Monday, November 15

• 08:30 AM Empire State manufacturing survey, November (consensus +21.6, last +19.8)

Tuesday, November 16

• 08:30 AM Retail sales, October (GS +1.1%, consensus +1.3%, last +0.7%); Retail sales ex-auto, October (GS +0.7%, consensus +1.0%, last +0.8%); Retail sales ex-auto & gas, October (GS +0.5%, consensus +0.7%, last +0.7%); Core retail sales, October (GS +0.5%, consensus +0.9%, last +0.8%):  We estimate a 0.5% increase in core retail sales (ex-autos, gasoline, and building materials) in October (mom sa). The Census measure is somewhat elevated relative to other high-frequency spending measures, and we believe the sunset of income-support programs weighed on some discretionary retail categories in the month following the strong back-to-school shopping season. We estimate a 1.1% increase in headline retail sales, reflecting rebounding auto sales and higher auto and gas prices.
• 08:30 AM Import price index, October (consensus +1.0%, last +0.4%)
• 09:15 AM Industrial production, October (GS +1.1%, consensus +0.8%, last -1.3%); Manufacturing production, October (GS +1.0%, consensus +0.9%, last -0.7%); Capacity utilization, October (GS 76.0%, consensus 75.8%, last 75.2%): We estimate industrial production rose by 1.1% in October, reflecting strength in oil and gas production and motor vehicle output, and a post-Hurricane rebound in areas affected by Ida. We estimate capacity utilization rose by 0.8pp to 76.0%.
• 10:00 AM Business inventories, September (consensus +0.6%, last +0.6%)
• 10:00 AM NAHB housing market index, November (consensus 80, last 80)
• 12:00 PM Richmond Fed President Barkin (FOMC voter), Kansas City Fed President George (FOMC non-voter), and Atlanta Fed President Bostic (FOMC voter) speak: Richmond Fed President Thomas Barkin, Kansas City Fed President Esther George, and Atlanta Fed President Raphael Bostic will take part in a discussion on racism and the economy, hosted by the Minneapolis Fed.
• 03:30 PM San Francisco Fed President Daly (FOMC voter) speaks: San Francisco Fed President Mary Daly will speak at the Commonwealth Club. Media Q&A is expected.

Wednesday, November 17

• 08:30 AM Housing starts, October (GS +1.0%, consensus +1.6%, last -1.6%); Building permits, October (consensus +2.8%, last -7.8%): We estimate housing starts increased by 1.0% in October, reflecting lower permits in September.
• 09:10 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will speak at the Treasury Market Conference, hosted by the Treasury Department and the Fed’s Board of Governors. Prepared text is expected.
• 11:00 AM Fed Governor Bowman (FOMC voter) speaks: Fed Governor Michelle Bowman will deliver introductory remarks at a virtual roundtable on the Fed’s Accounting Communication Network, hosted by the Dallas Fed.
• 11:20 AM Cleveland Fed President Mester (FOMC non-voter) and Governor Waller (FOMC voter) speak: Cleveland Fed President Loretta Mester will introduce Fed Governor Christopher Waller, who will discuss stablecoins at the Cleveland Fed’s 2021 Financial Stability Conference. Prepared text and moderated Q&A are expected.
• 12:40 PM San Francisco Fed President Daly (FOMC voter) speaks: San Francisco Fed President Mary Daly will speak to Rostin Behnam (acting chair of the Commodities Futures Trading Commission) in a fireside chat hosted by the New York Fed.
• 4:05 PM Chicago Fed President Evans (FOMC voter) speaks: Chicago Fed President Charles Evans will take part in a moderated Q&A hosted by the Mid-Size Bank Coalition of America.
• 4:10 PM Atlanta Fed President Bostic (FOMC voter) speaks: Atlanta Fed President Raphael Bostic will make closing remarks at a virtual conference on community development hosted by the Fed.

Thursday, November 18

8:00 AM Atlanta Fed President Bostic (FOMC voter) speaks; Atlanta Fed President Raphael Bostic will discuss the regional outlook at a virtual event hosted by the Metro Atlanta Chamber.

08:30 AM Initial jobless claims, week ended November 13 (GS 265k, consensus 260k, last 267k); Continuing jobless claims, week ended November 6 (last 2,160k)

We estimate initial jobless claims decreased to 265k in the week ended November 13; 08:30 AM Philadelphia Fed manufacturing index, November (GS 23.0, consensus 24.0, last 23.8): We estimate that the Philadelphia Fed manufacturing index declined by 0.8pt to 23.0 in November, reflecting continued production constraints.

9:30 AM New York Fed President Williams (FOMC voter) speaks; New York Fed President John Williams will speak on the transatlantic economic policy responses to the pandemic at an event hosted by the European Commission, the New York Fed, and the Centre for Economic Policy Research.

11:00 AM Kansas City Fed manufacturing index, November (consensus 30, last 31)

2:00 PM Chicago Fed President Evans (FOMC voter) speaks: Chicago Fed President Charles Evans will take part in a moderated Q&A hosted by the BKD Financial Services Symposium. Audience and media Q&A are expected.

3:30 PM San Francisco Fed President Daly (FOMC voter) speaks: San Francisco Fed President Mary Daly will take part in a Fed Listens event about the pandemic recovery and care work.

Friday, November 19

• 10:45 AM Fed Governor Waller (FOMC voter) speaks: Fed Governor Chris Waller will give a speech on the economic outlook at an event hosted by the Financial Stability Club in New York. Prepared text and Q&A are expected.
• 12:15 PM Fed Vice-Chair Clarida (FOMC voter) speaks: Fed Vice Chair Richard Clarida will discuss global monetary policy coordination, cooperation, and collaboration at a virtual event hosted by the San Francisco Fed. Prepared text and moderated Q&A are expected.

Source: DB, BofA, Goldman