This week we might have a strong US retails sales data along with weak initial jobless claims & weak regional surveys. The US no landing scenario continues uninterrupted. We expect yields to cool off in this week in light of expected weak employment data as well as regional surveys. Though storms are the driving force behind jump in initial jobless claims, doves might use them to drive down bond yields. Fed speak should turn neutral to hawkish this week considering last week data. In Eurozone, we expect the ECB to lower the deposit rate by 25bp to 3.25% on 17 October, owing to weaker September HICP inflation, a deteriorating growth outlook, and ECB speak increasingly guiding to such a cut. We expect ECB/Fed pricing to decouple in early Q1 2025, owing to much weaker euro area HICP relative to the ECB’s expectations and a continued deterioration in euro area activity data. In China, we expect GDP growth to have slowed to 4.5% year on year from 4.7% in 2Q24, mainly due to weak consumption and investment.
