The data calendar is reasonably heavy this week with the UK and Australia due to report labour market data while the US is due to release August figures for retail sales and industrial output. The Bank of England and European Central Bank also hold policy meetings with both unlikely to change their monetary policy settings. However, both central banks, and in particular the BoE, are likely to have discussed the issue of Brexit – an issue which will undoubtedly keep on making headlines in coming weeks and months. The US is also poised to introduce tariffs on a further $200bn of Chinese imports with China having threatened to retaliate in kind.
Monday 10th September
United Kingdom: NIESR forecast of GDP growth in Q3. A month ago the National Institute of Economic and Social Research forecast that UK GDP growth would rise to 0.5% qoq in Q3 from 0.4% qoq in Q2 and the latest official data would tend to support this forecast. The ONS, in data released today, estimates that real GDP growth accelerated to 0.3% mom in July from an average of 0.2% mom in May-June. But only a sizeable pick-up in GDP growth in Q3 would likely convince markets that the Bank of England will hike rates again in coming months.
United States: FOMC Member Bostic speaks
Tuesday 11th September
United Kingdom: Labour market data (July). The unemployment rate likely remained near 4% and the focus will be on the wage data. Real weekly wages have been broadly flat in the past two years which has constrained consumer demand and in turn inflationary pressures in the UK.
Germany: ZEW Economic Sentiment (September). The rebound in German economic growth in Q3 appears to have been modest and this data point will provide a first glimpse of how German economic sentiment, which has been depressed in the past six months, fared in early September.
Australia: NAB Business Confidence (August)
Wednesday 12th September
Australia: Westpac Consumer Confidence (August)
Eurozone: Industrial output (July)
United States: FOMC Members Bullard and Brainard speak
Thursday 13th September
Australia: Labour market data (August). As always the focus will likely be on the number of jobs created and importantly the breakdown between full-time and part time jobs. Australia has created a respectable 86,000 jobs in the past five months and the consensus forecast is that a further 18,400 jobs were created in August. However, this has yet to translate into materially faster wage growth and Australian households remain under pressure from high levels of personal debt, rising commercial bank rates and a slowing property market.
United Kingdom: Bank of England policy meeting. The Monetary Policy Council is likely to keep its policy rate unchanged at 0.75% although the more hawkish members may consider voting for a 25bp hike. The focus will be on the BoE’s assessment of the potential impact of the UK’s planned exit from the EU on the British economy.
Eurozone: European Central Bank policy meeting and press conference. The ECB is unlikely to make sizeable changes to its policy stance, sticking to its plan of starting to shrink its bond purchase of October. However, markets will be looking for signs that the US-China trade war, emerging market stress and concerns about the Italian budget and the UK’s planned exit from the EU are weighing on the Eurozone’s economic prospects and in turn on the ECB’s tentative plan to start hiking rates after summer 2019.
United States: CPI-inflation (August). Measures of US inflation have risen in the past year thanks in part to robust wage growth but the consensus forecast is that headline CPI-inflation edged lower to 2.8% from 2.9% yoy in July while core CPI-inflation was unchanged at 2.4% yoy. This would likely not stop the Fed from hiking rates later this month but if US inflation stabilises this could give the Fed food for thought as to whether to hike rates a fourth time before end-year.
United States: FOMC Member Quarles and Bostic speak
Friday 14th September
United Kingdom: Bank of England Governor Carney speaks
United States: Retail sales and industrial output (August). Growth in retail sales and industrial output has risen throughout the year, helping drive overall US GDP growth. The consensus forecast is for another robust increase in the value of retail sales (+0.5% mom) and that industrial output growth picked up to 0.3% mom following a tepid +0.1% mom in July. If these forecasts prove correct it would provide further evidence that US GDP growth remained solid in Q3 following 4% qoq annualised growth in Q2.
