TOP 5 economic news for the week - TeleTrade exclusives

In the coming week, we will closely monitor the US inflation data, as well as the comments of several Fed officials, which will help investors form their views on the future course of interest rates.

Retailers are due to report earnings amid concerns about inflation, and the economic outlook and oil prices look set to remain volatile. All the most interesting things are in our top!

Inflation data

Investors are waiting for the release of data on US consumer prices for October to get updated information on the Fed's progress in the fight to reduce inflation from the multi-year highs of last year.

Inflation is expected to rise by 0.1% on a monthly basis. The September consumer price index rose by 0.4% against the background of an unexpected increase in rental costs, but also showed the moderation of underlying inflationary pressure.

A sharp cold snap may intensify talks about peak rates caused by the October employment report. The latter pointed to the softening of labor market conditions.

The US will also publish data on producer prices along with retail sales data for October. They are expected to fall into negative territory after a series of confident monthly gains.

Reports of Fed officials

During the week, investors will hear the opinions of several Fed officials, including New York Fed President John Williams, Chicago Fed President Austan Goolsby, Governor Philip Jefferson and Governor Michael Barr. Policymakers are weighing the possibility of further tightening ahead of the Fed's next meeting on December 12-13.

Last Thursday, Fed Chairman Jerome Powell said that officials are "not sure" that interest rates are still high enough to end the battle with inflation. Although the Fed is not ready to overly tighten policy, Powell said that "the biggest mistake we could make is not being able to get inflation under control."

His comments were echoed by colleagues, and San Francisco Fed President Mary Daly said on Friday she was not yet ready to say whether the Fed had finished raising rates.

Investors were focused on Treasury bond yields, which declined slightly from 16-year highs. Market participants are assessing whether rates have really peaked and when the central bank may start cutting rates.

Retail income

The third-quarter earnings season is coming to an end, but several major retailers are due to report in the coming week. Investors are watching consumer spending grow.

Home Depot (NYSE:HD) will publish a report before the opening, followed by Target (NYSE:TGT) before the market opens on Wednesday. Results from Walmart (NYSE:WMT) and Macy's (NYSE:M) to be published on Thursday.

Target is struggling with rising costs, and the big box retailer has slightly reduced its recommendations, warning earlier this year that “shrinkage” (goods that are stolen) is hitting its revenue.

Wal-Mart shares hit record highs earlier this month, helped by rising revenue and earnings that far exceeded expectations when the company reported in August.

Other reports for the week include TJX (NYSE:TJX), Gap (NYSE:GPS) and China's Alibaba (NYSE:BABA).

Risk of US government shutdown

The risk of a federal government shutdown will increase if lawmakers in Washington fail to take measures to temporarily fund operations by Friday.

Tough demands for drastic spending cuts and tougher policies, including restrictions on abortion, split Republicans in 2023. At the same time, Republican centrists insist on a two-party approach that can win support in the Senate.

Speaker of the U.S. House of Representatives Mike Johnson on Saturday unveiled a Republican temporary spending measure aimed at preventing a partial shutdown. The unorthodox plan was quickly criticized by members of both parties.

New disputes may renew concerns about the governance of the world's largest economy.

Oil price volatility

Oil prices rose by about 2% on Friday as Iraq expressed support for a reduction in OPEC+ oil production ahead of a meeting to be held in two weeks. Some speculators have closed massive short positions ahead of uncertainty over the weekend.

Nevertheless, prices stabilized with weekly losses of 4%, which was their third weekly decline in a row.

Concerns about the outlook for global demand offset concerns about potential production disruptions related to the conflict in the Middle East. This happened against the backdrop of weak economic data from China, the US and the UK last week.

Energy traders are looking forward to the meeting between the Organization of Petroleum Exporting Countries and allies, including Russia, which will take place on November 26.

Analysts believe that OPEC+ may further reduce supplies if prices continue to fall.

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