On Saturday, Japan’s ruling LDP elected Sanae Takaichi as its first-ever female leader, paving the way for her to become the country’s first female prime minister.

The week ahead looks to be defined more by what isn’t being released than what is, as the US government shutdown enters its first full week. 

Analysts at HSBC Research said the disruption will likely delay economic data releases from key federal agencies, including the Bureau of Labor Statistics (nonfarm payrolls, CPI, PPI), the Bureau of Economic Analysis (GDP, PCE prices), and the Census Bureau (retail sales, international trade, new-home sales). (LS – Continue Reading) 

With Sanae Takaichi set to become Japan's prime minister, advancing expansionist economic policies, chances have risen that the central bank will avoid raising interest rates this month, though the pause may not last if it batters the yen. 

Takaichi, likely to become Japan's first female leader next week after winning the presidency of the ruling party on Saturday, stood out in the race as the only proponent of big spending and loose monetary policy. 

Parliament is expected to vote the conservative nationalist in as premier on October 15 since her Liberal Democratic Party is the largest in parliament, though this is not assured as the LDP's coalition lost its majorities in both houses under her predecessor, Shigeru Ishiba. (RTRS – Continue Reading) 

The NZIER Monetary Policy Shadow Board recommends that the Reserve Bank of New Zealand (RBNZ) continue to cut the OCR in the upcoming October Monetary Policy Review, with the majority of members recommending a 25 basis-point cut.  

This reflects the view that excess capacity in the New Zealand economy provides scope for a small cut to support a recovery in activity without affecting the inflation outlook. Several members considered that the much weaker-than-expected June quarter GDP warrants a 50 basis-point cut now to provide the stimulus required for recovery.  

One member suggested that the central bank should keep the OCR on hold, given the recent spike in inflation and that the impact of the OCR cuts to date is still working through the economy. Regarding where the OCR should be in a year’s time, members’ picks of the OCR centred on a range between 2.50 percent and 2.75 percent. (NZIER – Continue Reading) 

Oil opened higher after OPEC and allies agreed to raise production by a modest amount next month, staving off traders’ fears of a supersized quota increase.

Global benchmark Brent rose above $65 a barrel, while West Texas Intermediate was near $61. At a meeting on Sunday, the Organization of the Petroleum Exporting Countries and partners including Russia backed a 137,000-barrel-a-day increment, substantially below some of the possible figures reported in the run-up to the decision. (BBG – Continue Reading)