Week ahead: UK GDP, RBA rate decision, and Disney earnings dominate

Monday

UK construction PMI

The latest UK construction PMI reading is released on Monday with markets paying close attention given the collapse seen in September. Last month’s survey saw a particular slump in house building, and further weakness could be a sign of further weakness for stocks in that sector. Meanwhile September also saw the fastest decline in new orders for over three years, highlighting an industry that appears to be heading in the wrong direction. Markets are looking for an uptick after last month’s 45.0 reading, which represented the lowest figure since May 2020. Further weakness could raise jitters around the potential for a deeper slump in house prices.

Tuesday

RBA interest rate decision

The RBA expected to raise rates by 25 basis points on Tuesday, with the bank playing catch up compared to many of their western peers. While Australian interest rates stand at 4.1% going into this meeting, that stands in stark contrast to the 5.25-5.50% seen in the UK New Zealand and United States. While the RBA opted to pause last time around, their data dependent approach has come into question off the back of a worrying 1.2% CPI figure for Q3. On an annualised basis that quarter signals a decline from 5.4% to 4.8%, highlighting the RBA’s need to do more in a bid to avoid inflation becoming entrenched. The hike is not guaranteed so AUD volatility will be based on the decision alongside any outlook over future actions from the RBA.

Wednesday

Walt Disney earnings

The Walt Disney Company is gearing up to release its annual and Q4 earnings on November 8, with high interest in whether Disney+ will overcome its previous 7.4% subscriber dip, despite losing rights to the Indian Premier League and increasing its ad-free tier price. Investors also expect Disney to reveal the impact of economic pressures on its Parks division and are eager for updates on Hulu given the recent decision to buy out the remaining 33% stake from Comcast in a $8.6 billion deal. Also keep an eye on ESPN earnings, given the recent speculation that their decision to report standalone ESPN earnings could be indicative of an impending sale of the asset. The fourth quarter is usually a slow one for Walt Disney, and thus the year-over-year analysis will be crucial in understanding Disney’s trajectory in the wake of recent share price declines.

Thursday

Chinese inflation

While the world struggles to bring down inflation, China is faced with attempting to reflate prices. Markets are speculating that we could see fresh decline into deflation for the Asian powerhouse, with such a move raising questions over Chinese consumption and overall economic direction. Also keep an eye out for the latest PPI figure, which can provide a key signal of global prices given the impact Chinese exports play in global trade. This factory price metric has been contracting for the past year, although the recent upward trajectory could be due a setback according to expectations for a decline to -2.7%.

Friday

UK GDP

Friday has a big focus on the UK with third quarter growth data released alongside a host of other economic metrics. Markets predict a fall back into contraction in the third quarter, further dampening calls for an additional rate hike at the Bank of England. Elsewhere keep an eye out for September industrial and manufacturing production data, as markets attempt to gauge the strength of the UK economy going forward.