The month started with a strong U.S. jobs report, but the week ahead looks quieter, starting with Monday’s bank holiday. Economic data mainly consists of revised data and tertiary releases.
Wednesday’s ISM Services PMI and Thursday’s jobless claims were the exceptions. That said, Thursday’s revised productivity and unit labor costs will also be of interest given the Fed’s obsession with input costs, especially wages.
We’ll also hear from a number of Fed policymakers, including Susan Collins on Wednesday (the Beige Book is also out), Patrick Harker, John Williams and Raphael Bosti on Thursday grams, and Bostic on Friday.
Next week will be filled with Tier 3 events, although a ton of content was released at the time.Final inflation, GDP and PMI, regional retail sales data and surveys, and trade data make the Most of next week’s report.
Not insignificant in itself, but usually not a major market event, unless PMI and CPI reports lead to massive corrections.
We will be hearing from a number of ECB policy makers earlier this week, which may be in focus, including Christine Lagarde, Fabio Panetta, Philip Lane and Isabel Schnabel .
There will be little data next week, but Wednesday’s hearing of the Treasury Select Committee’s monetary policy report is usually one to watch.
While the committee’s views are usually fairly well-established by then, the skepticism is intense and can provide greater insight into the MPC’s stance on interest rates.
Inflation in Russia has picked up again and is expected to hit an annual rate of 5.1% in August, up from 4.3% in July. That’s why the central bank has again started raising interest rates aggressively – to 12% from 8.5% on August 15th.
Even so, the ruble has underperformed and is not far off its August highs before the super hike. We will hear from Deputy Governor Zabotkin on Tuesday, a few days before the CPI release.
The South African central bank will welcome further signs of deflation in producer price index (PPI) data on Thursday, but they are yet to declare the job done despite significant progress so far.
Next week’s focus will be on Tuesday’s GDP data, which is expected to rise 0.2% quarterly and 1.3% annualized. Earlier in the day, headline economic PMIs were to be released.
Next week will focus on CPI inflation data, with annual price growth expected to hit 55.9%, up from 47.8% in July. The CBRT is well aware of the risks, so last month it unexpectedly raised rates sharply – from 17.5% to 25%.
The currency rallied strongly following the decision but has since traded lower, falling back around pre-meeting levels. There is more work to be done.
Switzerland had another relatively quiet week, with GDP inching up 0.1% quarterly on Monday and the unemployment rate expected to remain unchanged on Thursday.
Neither move is likely to sway the SNB when it next meets on Sept. 21, with markets currently favoring no change, with a 30% chance of a 25 basis point hike.
Two key data to watch in the coming week; On Tuesday, NGOs released the Caixin services PMI for August, expected to be 54, almost unchanged from July’s 54.1.
If the outcome is as expected, it would mark the eighth straight month of expansion in China’s services sector, suggesting that despite a spate of recent deflationary pressures and contagion risks from major indebted property developers failing to pay their coupons in time The industry remains resilient. respective bond obligations.
The trade balance data for August will follow on Thursday, with export growth expected to slow to 10% YoY from -14.5% in July. Imports are expected to contract further by 11% yoy in July, down from -12.4% in July.
Interestingly, several key major economic data released last week suggested that China’s recent downturn will start to stabilize and possibly turn around.
National Bureau of Statistics’ August manufacturing PMI was better than expected, at 49.7 (market survey 49.4), higher than July’s 49.3, improving for three consecutive months, but still in contraction.
In addition, the two subcomponents of the NBS manufacturing PMI in August – new orders and production – are now in expansion mode, and both rose to their highest levels since March 2023, at 50.2 and 51.9 respectively.
Additionally, Caixin manufacturing PMI for August painted a more dynamic picture, expanding to 51 from 49.2 in July, above the consensus estimate of 49.3; the strongest pace of growth since February 2023.
Thus, the current patchwork of fiscal stimulus appears to have started to have a positive impact on the Chinese economy.
The services PMI for August is due on Tuesday and is widely expected to have eased slightly to 61 from 62.3 in July, the fastest gain in 13 years.Bank lending growth for August will be released on Friday, wrapping up the week.
The most important RBA monetary policy decision is due on Tuesday. The policy cash rate is expected to remain unchanged at 4.1% for the third consecutive month, as the recently released monthly CPI indicator has slowed to 4.9% yoy from 5.4% yoy, the slowest pace of growth since February 2022 , below the 5.2% consensus.
Interestingly, the ASX 30-day interbank cash rate futures for the September 2023 contract, based on data through 31 August 2023, point to a 14% cash rate at the upcoming RBA meeting on Tuesday The chances of a 25 basis point cut to 3.85% have increased slightly from the 12% chance of a 25 basis point rate cut extrapolated a week ago.
On Wednesday, second-quarter GDP growth will meet market expectations of 1.7%, a slowdown from 2.3% in the first quarter.
The trade balance for July is due to be released on Thursday and is widely expected to have narrowed to A$10.5 billion from a three-month high of A$11.32 billion in June.
Two data points to watch: Monday’s Q2 terms of trade and Tuesday’s global dairy trade price index.
The week ahead will be a quiet one, with preliminary leading economic indicators due on Thursday and final second-quarter GDP on Friday. Preliminary data showed annualized growth of 6%, beating first-quarter GDP of 3.7% and the consensus estimate of 3.1%; this was the largest increase since the fourth quarter of 2020 and the third consecutive quarter of annualized economic expansion.
July retail sales data, due on Tuesday, is expected to have risen 0.9% year-on-year, down from June’s 1.1% increase. Growth was the weakest since July 2021 as Singapore’s economy grapples with a weak external environment.
On a monthly basis, the pace of contraction is expected to have slowed to -0.1% in July from -0.8% in June.
Editor’s note: Summary points for this article were selected by the Seeking Alpha editors.