Coming up in the markets


Watch for RBA meeting minutes, AU employment, NZ CPI, China GDP, UK CPI, Netflix and Tesla Q3 earnings.
Key Takeaways
Netflix will be the first big US tech company to report its results after the US market closes on Wednesday | Photo by Ethan Miller/Getty Images

Major central banks have been raising rates at their fastest pace to battle sticky inflation this year, darkening the global economic outlook.

Wall Street reversed early losses on Thursday and sharply rebounded on hotter-than-expected CPI data. The US headline inflation printed at 8.2%, higher than an estimated 8.1%, and the core CPI excluding food and energy came in at 6.6%, above the consensus of 6.5%, which is also the highest since 1982.

With the US major tech companies, including Netflix and Tesla reporting third-quarter earnings in the coming week, investors will get more clues about how bad of an impact on these businesses global headwinds might be. We will be monitoring the key economic data to further explore the shape of the global economy.

Netflix and Tesla Q3 earnings in focus

The major events that could overshadow the current gloomy macro scene will be the upcoming major US tech company earnings. Netflix will be the first big US tech company to report its results after the US market closes on Wednesday. The live streamer added an ad-supported tier to its program, which is expected to grow subscribers by 40 million viewers worldwide by the third quarter of 2023. The company’s share price bounced off its year low since July but still has a 60% year-to-date loss. The forecast for EPS is US$2.14, a sharp decline from US$3.20 in the second quarter. 

Tesla will report earnings after the US markets close on Thursday. The EV maker delivered 343,830 electric cars in the third quarter, short of an estimated 358,000 but still record output. However, the company’s share price plummeted 38% since its 3-for-1 share split, along with the drama over CEO Elon’s Twitter deal. Its production capacity and further guidance in demand will be a focus for the upcoming earnings. The forecast for its EPS is US$1.04, up from US$0.76 in the second quarter.

RBA meeting minutes

The RBA meeting minutes will be released on Tuesday. The Reserve Bank of Australia surprisingly downsized its rate hike to 25 basis points after four 50 bps hikes in a row, which might mark a turnaround for its monetary policy. The RBA is the first western central bank that has turned less aggressive in raising interest rates amid a sharp decline in the local housing market and a darkened global economic outlook. The official cash rate (OCR) is now at 2.6%, with an expectation of another two 25 bps rate hikes in November and December, bringing the OCR to 3.10%, lower than both the US Fed and the RBNZ’s projection of above 4% by year-end, which may continue to press on the Australian dollar.

The jobs data due for release on Thursday is expected to stay solid, with the unemployment rate dropping to a record low of 3.4% in September. In August, Australia added 33,500 new jobs, with the unemployment rate at 3.5%, or a 0.1% increase from the prior month.

China’s Q3 GDP: Is the annual growth target out of reach?

China’s GDP data will be out on Tuesday. Due to the Covid-zero policy, China’s economic growth is expected to significantly slow in the third quarter, with economists’ estimate of 3.5% from the second quarter of 4.2%. The annual GDP growth target is set at 5.5% but this might be already out of reach due to the country’s Covid curbs. China will also release retail sales and Industrial output data for September on the same day, providing more clues for its economic trajectory.

New Zealand’s third-quarter inflation may rise further

New Zealand’s third-quarter CPI is due for release on Tuesday. A sharp decline in the New Zealand dollar might have worsened domestic inflationary pressure, with the headline inflation running at 7.3% year-on-year in the second quarter. Economists expect the country’s inflation could reach as high as 7.10% by the year-end. The Reserve Bank of New Zealand raised the cash rate by 50 basis points for the fifth time in a row, taking its OCR to 3.5% in early October, the highest among the major central banks. The divergence of policy guidance between the RBNZ and the RBA lifted the NZD against the AUD since the announcement in the first week of October.

UK’s CPI may stay elevated

UK’s inflation data will be released on Wednesday. The country’s consumer price printed at 9.9% in August, down from 10.1% in July due to a drop in petrol prices. However, food prices could keep the inflation data at a high level, especially with the recent market rout that was sparked by the new Prime Minister’s tax cut plan. The BOE has flagged its temporary bond-buying program will expire at the end of the week.

Tina Teng is a markets analyst for CMC Markets APAC & Canada.

This article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. Past performance is not necessarily indicative of future performance. You should seek independent financial and tax advice before making any decision based on this information.