Oct 16 (Reuters) - Earnings season is shifting up a gear in the US, and China is about to deliver a deluge of data, giving febrile markets plenty more to ponder after the latest bouts of volatility in bonds and AI stocks.
Central bankers in Indonesia and Turkey have been given headaches by global index provider MSCI, while voters in Brazil gear up to choose their next president.
Here's all you need to know about the coming week in financial markets by Gregor Stuart Hunter in Singapore, Lewis Krauskopf
and Rodrigo Campos in New York, Amanda Cooper and Karin Strohecker in London.
1/ EARNINGS SEASON IS HERE
US earnings season picks up in the coming days, with investors focused on Meta Platforms and other AI-focused companies as technology shares wobble.
Meta, due on Wednesday, is one of several hyperscalers whose massive spending on AI data centres and infrastructure has been a big driver of investment. With concerns mounting over financing for the AI buildout, investors want more detail on expected returns from those huge outlays.
Reports from semiconductor companies Lam Research and Texas Instruments will offer another view of the AI boom, as will results from Elon Musk's Tesla.
Other high-profile results in the coming days include Netflix, Procter & Gamble and GE Aerospace. S&P 500 earnings are expected to have climbed more than 30% in the third quarter, according to LSEG IBES, continuing a robust year for corporate profits.
2/ CHINA DATA DELUGE
A health check on the Chinese economy is due on Monday, with third-quarter GDP alongside September retail sales, industrial output and fixed-asset investment data. The latest loan prime rate follows on Tuesday and is expected to stay put after more than a year on hold.
Strong global demand for semiconductors, clean technology and other manufactured goods has kept China's economy ticking, even as domestic demand remains patchy and higher energy costs bite. Exports have held up despite China's delicate trade balancing act with the US and EU.
The latest trade figures showed Chinese exports surging well beyond analysts' estimates, putting the country on track for another $1 trillion trade surplus this year after crossing the threshold for the first time in 2025. The flip side: the export boom could add to trade tensions with major partners.
3/ STAIRWAY TO HAVEN
For months, as energy and food prices surged amid the Iran war, bonds lost their shock-absorber status as investors jacked up estimates of how high interest rates might need to go.
Add near-chronic concern about developed-world governments' finances, and bonds seemed to offer little safe-haven comfort while still struggling to rival super-charged equities.
The correlation between stocks and bond yields has now turned positive for Europe and the US, meaning yields are more likely to fall when stocks fall. It had been overwhelmingly negative this year, with yields rising as stocks fell, undermining bonds' traditional role as a haven during equity selloffs.
This relationship fluctuates, but this year, the correlation of US stocks and bond yields in March hit its most negative since at least the 1990s, while for European assets, it reached its most negative on record in September.
4/ BRAZILIAN RUNOFF ROULETTE
Brazil's October 25 presidential runoff is keeping markets on edge after Flávio Bolsonaro's surprise first-round lead sent stocks up 7.7% and the real almost 4% higher. A new Quaest poll puts Bolsonaro on 46% versus Luiz Inácio Lula da Silva's 44%, a technical tie.
Investors are betting a Bolsonaro win would bring tighter fiscal policy, but much may already be priced in. His choice of economic team and signs of credible reform could fuel further gains.
A Lula comeback, meanwhile, could put that rally into reverse, with the real, longer-dated bonds and state-controlled companies among the most exposed. A more conservative Congress, though, could limit how far Lula could shift policy.
5/ AN MSCI HEADACHE
Central bankers in Indonesia and Turkey already have plenty on their plates. Now they have an MSCI headache, too.
Indonesia's central bank meets on Wednesday, while Turkish policymakers gather on Thursday, against a backdrop of high energy prices, rising borrowing costs, AI-driven market disruption and geopolitical uncertainty.
MSCI has proposed stripping Indonesia of its emerging-market status and removing it from a suite of indexes, a move that risks triggering heavy outflows and raising pressure on policymakers to hike from 5.75% rather than hold.
MSCI has also put Turkey on notice, warning of a potential downgrade if market reforms fall short by mid-2027, another complication for policymakers expected to keep cutting rates from 37%.
(Graphics by Prinz Magtulis; Compiled by Karin Strohecker; Editing by Hugh Lawson)
