US: Focus on consumer expectations and budget – Nomura

Analysts at Nomura suggest that the NY Fed Survey of Consumer Expectations and budget will be the key economic releases for today’s US session.

Key Quotes

“In October, the NY Fed’s inflation expectations measures increased slightly at both the one- and three-year horizons, but remained within a steady range. Elsewhere, household financial expectations deteriorated somewhat, in contrast with consumer surveys from the University of Michigan and Conference Board. This deterioration was likely transitory and November could see some rebound in sentiment as consumer fundamentals remain firm and the transitory effects from the recent hurricanes diminish further.”

“US budget: The October budget statement from the Treasury will mark the beginning of fiscal year (FY) 2018. During FY 2017, the budget deficit increased to $666bn, from $586bn during the previous fiscal year. In June 2017, the CBO estimated a somewhat smaller deficit in FY 2018 ($563bn) owing to a modest increase in individual income tax payments. Historically, outlays outpace receipts in October. Thus, a budget deficit during the first month of FY 2018 would not be unexpected. Consensus expects a deficit of $50bn for October.”