Trick or treat?

Shaping the markets - this week

Trick or treat? Investors hope for no nasty surprises from Fed policy meeting

• Investors will be hoping that there will be no unpleasant tricks from the Fed when it announces its latest policy decision on Wednesday; markets continue to expect that tapering is off the cards for now. There are a number of extra data treats in store as the US continues to play catch-up on September’s delayed releases. Analysts expect industrial production (Monday) to increase by 0.4% month-on-month (mom), total retail sales (Tuesday) to come in flat, while the annual core inflation rate (Wednesday) may slip to 1.7% from 1.8% previously. Also in the mix is October data for consumer confidence (Tuesday) and ADP private payrolls (Wednesday), while the end of the week sees the publication of the ISM manufacturing survey. October’s data may evidence that confidence, jobs and business activity have been negatively affected by the 16-day government shutdown.

• In the UK, September mortgage approvals, consumer credit and money supply data are due on Tuesday, while October’s manufacturing PMI will be in the spotlight on Friday. Analysts think that the survey may slip back slightly from September’s reading of 56.7 (a reading greater than 50 indicates expansion). Thursday should be a notable day for eurozone releases with unemployment and a preliminary reading of inflation data for October providing further clues on the strength of the region’s economic recovery. In Asia, Japan’s calendar becomes busy from Tuesday, with real household spending, unemployment, and retail sales data scheduled. Japanese manufacturing PMI, construction orders, and the Bank of Japan’s policy decision all follow on Thursday.