Weekly financial market overview 12.10.-18.10.
Main events of the previous week
Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), has called for significant steps to address the increasingly unsustainable debt burdens of developing countries amid the coronavirus pandemic. “We are buying some time, but we have to face reality that there are much more decisive actions ahead of us,” said Kristalina Georgieva. According to her, it is necessary to immediately begin negotiations on restructuring the debts of countries in need. She warned that in 2021 the level of global debt will reach 100% of GDP and the negative impact of sovereign defaults could quickly spread. In April, the G20 granted the world's poorest countries the right to suspend payments on external sovereign debt, including servicing it, until the end of this year. The more than $20 billion thus freed should go to fight the coronavirus pandemic. On October 14, the G20 countries agreed to extend this moratorium for another six months. According to the latest forecast of the IMF, this year the world economy will record a significant decline of almost 4.4%, but it will recover and grow by 5.2% next year.
USA. Consumer price index in September rose by 0.2% versus August, while the annual inflation was 1.4%. The growth of the core inflation rate excluding food and energy in September amounted to 1.7% y/y.
The number of initial jobless claims for the week was registered in the amount of 898 thousand, which is 43 thousand more than the week before and 63 thousand more than predicted by analysts.
Retail sales rose 1.9% in September versus August, while retail sales were expected to grow 0.7%. In turn, excluding data on gasoline and car sales from the indicator, retail sales in September grew by only 1.5% over the same period.
Eurozone. The consumer price index in September rose by 0.1% versus August, while the annual inflation was negative and amounted to -0.3%. The growth of the core inflation rate, excluding food and energy in September amounted to 0.2% y/y.
Industrial production in August increased by 0.7% versus July. In turn, the drop in industrial volumes in annual terms was 7.2%.
China. The consumer price index in September rose by 0.2% versus August, while the annual inflation rate was 1.7%.
The trade surplus in September was $37 billion. Export growth in September amounted to 9.9%, while imports in September increased by 13.2%.
Key events this week
- On Monday, China will report a lot of economic data that will include third-quarter GDP growth, industrial production, retail trade and unemployment for September.
- On Wednesday, the US will report on changes in oil reserves for the week.
- On Thursday, the US will reveal the number of initial jobless claims for the week and we will be able to see the last official debate between Trump and Biden ahead of the November 3 elections.
- On Friday, the primary assessment of the state of the business sector in October will be published in the Eurozone and the United States.
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