Preview of Powell Speech on October: Will it Compensate for the Delay in Economic Data?

Markets are on their toes awaiting the Fed Chair, Jerome Powell’s scheduled speech, as economic data releases are delayed due to the US government shutdown for the second consecutive week. Analysts view the current US government shutdown as a further complication to the Fed’s task, especially if the shutdown continues till the next Fed meeting on October 29.

In Europe, inflation is further pressuring the European Central Bank’s (ECB) policy. So do the US’ trade tariff laws.

As for Japan, the ruling party has elected a woman to lead it for the first time in history. Making it a likelihood for her to be appointed prime minister, as the country faces challenging economic and geopolitical realities.

Meanwhile in China, large-scale financing initiatives have raised speculation about Beijing’s role as a stabilizing global force, despite recent turbulence, including a sixth consecutive month of factory contraction—the longest industrial slump since 2019. 

Key takeaways:

US government shutdown threatens the economy still
Labor market data is delayed for next week. Will it be out then?
Japan elected its first woman to lead the ruling party, ahead of prime minister's appointment this month
China faces its longest recession since 2019

Powell Speech Preview: Impact on Major Financial Markets

The US market: Powell Speech Preview and the Impact of Delayed Data

The US government is facing its 15th shutdown since 1981 after the Democrats and Republicans failed to reach a consensus on spending terms. This led the closely followed economic data releases to be delayed no less than four weeks ahead of the late October Fed meeting.

Despite the delay, markets remain optimistic about potential upcoming rate cuts in the coming Fed meeting. citing weak labor readings as the main motivator.

After the US government failed four times to pass a spending proposal so that the federal government can reopen, government closure may continue till October 14. Which in turn might further delay the release of the trade balance report meant for this week.

Market participants and watchers are also keeping an eye on the government shutdown updates in order to see whether the labor market data will be released this week or delayed further.

Preview of Jerome Powell's Speech

Wall Street is all focused on the Fed’s Chair, Jerome Powell’s speech, in conjunction with the start of the third quarter earnings season.

Powell is scheduled to speak at a banking conference in Washington, D.C., on Thursday.  Markets are awaiting the release of the Federal Open Market Committee (FOMC) meeting minutes from September 17. The minutes will be released on Wednesday, in addition to the recent statements of several Fed members like Michelle Bowman and Neel Kashkari.

EU Market: Context Around the Powell Speech Preview and ECB Inflation

The EU’s economy is facing a dire state due to the turbulent geopolitics. However, the content is still focusing on inflation, which has risen in the union’s largest economies in September. Emphasizing the ECB’s need to reach the 2% threshold.

The ECB has also expressed concerns that the US’ unclear policies towards the EU are causing a slowdown in borrowing and investments on a wide scale in the eurozone. This means that the upcoming ECB interest rate decision, scheduled for this month, is to have a lesser effect than anticipated.

Unexpectedly, ECB President Christine Lagarde struck an optimistic tone, suggesting that the impact of US tariffs has eased thanks to the strength of the euro, ongoing trade agreements with the US, and the lack of retaliatory tariff measures.

On a similar optimistic note, the Czech Republic showed a promising advancement in the automobile industry, contrary to the struggling EU automobile industry. The country produced a total of 1.4 million cars in 2024. its highest number to date. marking it as the only European country to witness a spike in car production. The Czech brand Škoda remains a symbol of the nation’s automotive strength.

Japanese Market: Expected Impact of Powell’s, Yen Reaction, and Stocks Momentum

Japan’s Liberal Democratic Party (LDP) has elected Sanae Takaichi as its new leader, paving the way for her to become Japan’s first female prime minister, pending confirmation in a parliamentary vote on October 15.

This anticipated election is expected to have a negative impact on the yen, contrary to the Japanese stocks that continue to rise and break new high records.

The country is continuing in seeking out new trade partnerships, with a new deal with Pakistan being the latest. The deal focuses on the two countries' shared bilateral trade and investment, with trade rising 54% over the past five years between them.

As for Japan’s latest economic data releases, the service sector continued to make gains in September, backed by strong local demand. Which comes as a surprise as factory contracts regress, according to recent private sector surveys.

These surveys also showed business sentiment reaching its highest level in eight months as optimism over corporate expansion plans and new product launches drives markets.

The Chinese market: Beijing’s Stimulus, and Factory Contraction

Analysts and experts have recently praised China’s position as a driving power in the global economy. They cited the country’s targeted financing initiatives and domestic demand support measures as evidence of proactive policymaking and long-term growth potential.

The National Development and Reform Commission (NDRC)—China’s top economic planning body—announced a new policy-based financial instrument worth 500 billion yuan ($70.2 billion USD) aimed at improving financial services for the real economy and boosting effective investment.

At the China-US relations front, China has recently offered to invest $1 trillion in the American economy in return for lifting US sanctions on Chinese companies looking to invest in the US market.

Experts described China’s internal and external reforms as preventive steps for possible deeper economic issues, especially as recession in factory output continues for the sixth month, the country’s longest recession since 2019.

Economic Calendar following upcoming Jerome Powell Speech on 9th of October:

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