Asia week ahead: China data dump in focus

China’s Singles Day (Black Friday equivalent for e-commerce) on 11 November will provide us with a view of how consumption is faring – we suspect that given the shift toward value-for-money purchases and online shopping, we’ll continue to see solid growth numbers from the event that should comfortably outpace the overall consumption growth momentum.

In terms of data releases, China’s CPI data comes out on Saturday morning, where we’re looking for little change in the year-on-year numbers with CPI inflation at 0.4% YoY. China’s data dump is scheduled for the coming Friday, where we are looking for data to generally move a little stronger in October in the first full month since the monetary easing from September.

Strong PMI data sets a foundation for an uptick in industrial production, where we are looking for a rise to 5.6% YoY, while retail sales are likely to remain under pressure but should still edge up a little higher to 3.5% YoY. Fixed asset investment has stabilised somewhat but we don’t see much room for a significant uptick until fiscal stimulus starts to take effect. As usual, housing prices will be scrutinised closely for signs of a potential stabilisation, where even a narrower decline would likely be seen as welcome news.

Japan will release its third-quarter GDP data for the year next week. We expect growth to slow to  0.3% quarter-on-quarter seasonally adjusted from 0.8% in the second quarter, as typhoon and mega-earthquake warnings partially hamper economic activity. Private consumption is expected to rise modestly while construction and facility investment are expected to contract. We think growth will reaccelerate in the fourth quarter, boosted by a technical payback.

We expect the Australia labour market to gradually soften in the fourth quarter of this year, and for unemployment to rise to 4.3% as labour supply and participation remains strong but job creation weakens.