Market movers today
Today, S&P may publish its rating decision on Italy. We expect that the S&P will change the outlook to negative but keep the rating unchanged. This should have modest negative impact on Italian government bonds on Monday next week.
In the US, we get the first estimate of GDP growth in Q3. Atlanta Fed's GDPNow estimate says it was 3.9% q/q AR, while the NY Fed Nowcast indicator says it was just 2.2% q/q AR. We are believe it was probably slightly higher than 3.0% q/q AR, which is relatively strong, at least in this expansion.
Another important US release is the PCE core which we estimate rose 0.1% m/m in September and it is likely core PCE rose 1.5% q/q AR, but watch out for revisions. The figure will probably not change anything for the Fed, which is on autopilot until it reaches 3% in June next year after hikes in both December and March.
In Russia, the Bank of Russia (CBR) will have to make the penultimate monetary policy decision of the year today. Inflation has started climbing on a low base effect and fuel price increases. At the same time, the approaching VAT hike and the surge in the RUB's volatility have pushed up inflation expectations, which are closely monitored by the CBR. While we expect Russia's key rate to remain unchanged at 7.50% today, there is a risk that the CBR could refer to surging inflation expectations and deliver a 25bp hike.
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