The week ahead - 11 - 15 November 2024

United States – Wednesday sees the release of October CPI inflation. While market sensitivity shifted from inflation to the labour market over the past months, Trump's victory, and his inflationary policy proposals, might bring back attention to inflation. We expect headline and core inflation to come in at 0.2% and 0.3%, similar to last month. Due to a low m/m figure from one year ago dropping out, the headline y/y figure will increase to 2.6% from 2.4%, while core remains at 3.3%. Shelter inflation is expected to contribute less as the CPI has mostly caught up with third-party price levels. October always sees a methodological change to medical insurance, which will be informative on inflation in the coming months. A drop in gas prices is the main cause of headline rising less strongly than core. Friday's headline retail sales likely rose by 0.2%, on the back of a pickup of car sales, but held back by the impact of the hurricanes. The control group, which excludes, amongst others, cars, likely remained flat. Downward momentum and the October hurricanes are likely to have further weakened industrial production. Finally, throughout the week, there are many speeches by Fed officials, which are likely to shed more light on the discussion of the latest FOMC meeting.

Eurozone – Eurozone industrial production over September likely contracted on a monthly basis, however the series remains quite volatile on a monthly basis. This is consistent with the eurozone manufacturing PMI output subcomponent slipping further in contractionary territory in September. Overall, the eurozone industrial sector continues to be a drag on overall activity and while some stabilization is expected in the near term, a more meaningful recovery is not expected any time soon.

Q3 GDP will likely be revised slightly higher unrounded, given stronger incoming consumption data, but the rounded figure should hold at 0.4% q/q.

The Netherlands – Q3 GDP published on Thursday is expected to marginally increase by 0.2% q/q, following the unexpectedly strong 1% growth in Q2, which was mainly on the back of rising exports and government consumption. We expect growth to be driven by domestic demand, from government spending and household consumption somewhat recovering from the strong decline in Q2. Still, although real incomes are improving from high wage growth and declining inflation, consumers seem hesitant to spend and favour saving and deleveraging. The outlook for external demand and private investments remains subdued although the stronger than expected eurozone Q3 GDP print provides some upside potential to our 0.2% qoq forecast. All in all, this reflects our view on the Dutch economy for 2024, where growth will gradually pick-up but will remain below the trend rate in the coming quarters.

China – Inflation, lending and activity data for October (industrial production, retail sales, fixed investment) will be published the coming week. Following an improvement in September activity data and the October PMIs, the October activity data are expected to show further signs of an improving momentum on the back of a stepping up of stimulus. Meanwhile, general expectation including ours is for the PBoC to keep the 1-year medium-term lending facility rate (exact date unknown, scheduled for 15-25 November) unchanged at 2.00% for now, although we expect further RRR cuts and modest policy rate cuts going forward – alongside more fiscal stimulus.