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Key events on Wednesday - Westpac

FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, reviews the day ahead, paying special attention to ECB's Draghi speech, UK jobs as well as US retail sales.

Key Quotes

The Oct reading on Australian consumer sentiment from Westpac & Melbourne Institute is due at 10:30am Syd/7:30am Sing/HK. The headline index started the year comfortably above 100, slid to 92.9 in May as the federal budget was delivered and was only 94 in Sep. Weakness in Australian shares over the month won’t have helped while the jobs data probably just caused confusion.

Consensus for the Bank of Korea decision is a 25bp cut in the repo rate to 2.0% (approximately 12pm Syd/9am Sing/HK, often a little late). We agree with this view given dovish commentary from government officials, inflation running at just 1.1% y/y and poor confidence readings. However, a sizeable minority look for no change.

In early Europe (4pm Sing/HK) we hear from ECB president Draghi. The UK calendar is important: Sep jobless claims and Aug unemployment. Consensus is for the 3 month average jobs change to slip to 30k from 74k in July but Westpac looks for -11k, which would be a jolt for sterling. The twice-monthly global dairy auction takes place during the London afternoon.

The US data calendar is crowded though most attention will be on Sep retail sales. Falling gasoline prices should shave the value of headline turnover -0.2% m/m, but sales ex-autos & gasoline should rise about 0.4%, after 0.5% in Aug. Aug business inventories are seen up 0.4% while the Sep PPI is expected to remain muted, 0.1% m/m, 1.8% y/y overall. Sep federal budget data is also due. The Fed’s Beige Book of regional economic anecdotes is due late in the session, likely to be filled with adjectives such as modest and moderate.

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