The US calendar is particularly heavy this week, with the release of durable goods, international trade, personal income, spending and PCE inflation data for August and consumer confidence numbers for September. Importantly, the Federal Reserve is due to conclude its policy meeting on Wednesday.
In the Eurozone the focus will be on CPI-inflation data for August due out on Friday and on speeches by ECB President Draghi. The data calendar is light in the UK but with the opposition Labour Party’s conference in full swing Brexit-related issues are likely to continue dominating the headlines. Bank of England Governor Carney is also due to speak on Thursday.
Finally, the RBNZ is likely to keep its policy rate on hold at 1.75% but may be less dovish than in recent months.
Monday 24th September
China, Japan, South Korea and South Africa on holiday
Eurozone: German IFO business climate index (September). The index was broadly stable in at 103.7, according to data out this morning, pushing up the average for Q3 to 103.1 from 102.2 in Q2. This suggests that while Eurozone GDP growth seemingly did not pick up much if at all in Q3 growth in the Eurozone’s largest economy did rebound from a 6-quarter low of 1.93% yoy in Q2. At the margin Euro-supportive.
United Kingdom: Day-two of Labour Party conference. The opposition party is likely to approve a motion which would keep the option of a second Brexit referendum on the table.
Eurozone: ECB President Draghi to speak
Tuesday 25th September
South Korea and Hong Kong on holiday
United Kingdom: MPC member Vlieghe to speak at Imperial College Business School (see: https://www.bankofengland.co.uk/speech/2018/gertjan-vlieghe-imperial-college-business-school-london )
United States: Consumer Board Confidence Index (September). US consumer confidence has steadily risen in recent years which has contributed to strong (real) retail sales growth of nearly 4% yoy. So far there has been little evidence that the US-China trade war is impacting consumer confidence but analysts expect a small dip in the index to 132.2 in September from 133.4 in August.
New Zealand: Trade balance (August).
Wednesday 26th September
New Zealand: ANZ Business Confidence index (September).
United States: Federal Reserve policy meeting + updated projections + press conference hosted by Chairperson Powell. With a 25bp Fed rate hike to 2.00-2.25% looking like a near certainty, markets will focus on the odds of the Fed hiking rates again in December. Specifically, attention will likely be on the Fed’s updated economic projections, including the 15 FOMC members’ expectations for rate hikes for the rest of 2018 and 2019, and the Fed’s assessment of how the US-China trade war will impact US economic growth and inflation and in turn its policy rate outlook.
New Zealand: Reserve Bank of New Zealand Reserve policy meeting + statement. The RBNZ will very likely leave rates on hold at 1.75% but markets will be paying attention to the statement’s language which was dovish at the previous meeting. The RBNZ is likely to be more balanced this time round following the release of strong Q2 GDP data.
Thursday 27th September
United Kingdom: Bank of England MPC Member Haldane to speak. Haldane is not regarded as one of the more hawkish of the nine MPC members.
United States: Durable goods orders (August). This proxy for US investment fell 1.7% mom in July and analysts expect a 1.9% mom rebound in August which would provide further evidence of a strong quarter for headline GDP growth.
United States: Q2 GDP (third estimate). Headline growth was revised to 4.2% qoq in the second estimate reading and but analysts expect no change in the third and final reading and are more likely to focus on US GDP growth in Q3 and beyond.
United States: Trade balance (August, preliminary). The US goods trade deficit widened to $72bn in July and analysts forecast another sizeable deficit of $70bn in August. This is unlikely to be music to President Trump’s ears and the US administration is unlikely to back down from threats of further import tariffs in order to shrink the United States’ large trade deficits with its key trading partners, including China.
Eurozone: ECB President Draghi and Board Member Praet to speak. If Eurozone monetary policy is brought up, Draghi and Praet are likely to reaffirm the ECB’s plan to start reducing its monthly bond purchases as of October.
United Kingdom: Bank of England Governor Carney to speak. Carney has been bearish on the prospects of the UK reaching a Brexit deal with the EU and in particular on the prospects for the UK economy in the event of the UK leaving the EU without a deal.
United States: Fed Chairperson Powell and FOMC member Kaplan to speak. They may have little new to add on the issue of US monetary policy given that the Federal Reserve will have announced its policy decision and delivered its accompanying statement the day before.
Friday 28th September
Australia: Private sector credit (August)
United Kingdom: Q2 GDP (second reading)
Eurozone: CPI-inflation (September, preliminary). Headline and core CPI-inflation have been steady around 2% yoy and 1% yoy respectively since May and analysts again expect broadly unchanged numbers for September. Steady Eurozone CPI-inflation is likely to reinforce the odds of the ECB halving its monthly bond purchases to €15bn as of October but may also see the ECB sticking to its view that policy rate hikes are unlikely until after Summer 2019.
United States: FOMC member Barkin to speak
United States: Personal income, spending and PCE inflation (August). Robust US wage growth has been driving strong consumption and in turn a slow but steady increase in the important measure of core PCE inflation to 2.0% yoy in July. But analysts expect this measure of inflation, which the Federal Reserve tracks, to have remained unchanged in August.
Sunday 30th September
United Kingdom: Start of ruling Conservative Party annual Conference
