The past fortnight has been light on macro data releases but everything changes this week. The US is on holiday today but is then scheduled to release all-important PMI and labour market data for August. The UK is also due to release manufacturing, construction and service sector PMI numbers but more importantly Parliament will resume its session on Tuesday, with all eyes on whether pro-Remain parties can block a “no-deal” Brexit. In Switzerland, the focus will be on the release of inflation figures (Tuesday) and Q2 GDP ahead of SNB Chairman Jordan’s speech on Thursday afternoon. On the other side of the world, it’s also a heavy data and event week for Australia. Retail sales, Q2 GDP and trade data are due out while the RBA holds its policy meeting on Wednesday.
Monday 2nd September
United States: Labour Day (public holiday)
United Kingdom: Manufacturing PMI (August). The index of economic activity in the UK manufacturing sector was unchanged at a six-and-a-half year low in July but analysts forecast only a modest increase in August to 48.4. In any case these data are likely to be over-shadowed by Parliament returning on Tuesday after its summer recess.
Tuesday 3rd September
Australia: Retail sales (July). This is a choppy monthly series but retail sales have held up reasonably well this year, rising 0.5% in May-June.
Australia: Reserve Bank of Australia policy meeting. The RBA, which has twice cut rates 25bps since June, is expected to leave rates on hold at 1.00%.
United Kingdom: The House of Commons, the lower house of parliament, will sit for the first time since its summer recess but, following Prime Minister Johnson’s decision last week, will only sit until 12th September at the latest before being suspended until 14th October. This gives pro-Remain political parties and politicians very little time to mount a challenge to the government’s decision to take the UK out of the EU, with or without a deal. There has been speculation that opposition parties will seek a no-confidence vote in the government and, in the event of victory, try to install an interim government but there is still seemingly disagreement as to who should lead it. There is also a number of pending legal challenges against a no-deal Brexit.
Switzerland: CPI-inflation (August). Headline CPI-inflation fell to a two-year low of 0.3% yoy in July, partly as a result of the Swiss Franc’s strength mid-year, and analysts forecast a further fall to 0.2% yoy in August. The risk of deflation has seemingly spooked markets and a reversal of safe-haven flows into Switzerland.
United States: ISM manufacturing PMI (August). This index of economic activity in the US manufacturing sector has been on a clear downtrend in the past 12 months and analysts forecast another small fall to 51.0 in August from 51.2 in July. If realised, this would imply that the index slowed to 51.1 in July-August from 52.2 in Q2 and point to a further slowdown in US GDP growth from 2.0% qoq annualised in Q2.
Wednesday 4th September
Australia: GDP (Q2). GDP growth doubled to 0.4% qoq in Q1 from Q4 2018 and analysts forecast an up-tick to 0.5% qoq in Q3. This would be a decent performance given the backdrop of slowing global economic growth and justify the RBA keeping rates on hold for now.
United Kingdom: Services PMI (August). The index of economic activity in the important service sector (which accounts for about 70% of UK GDP) has held up far better than the manufacturing PMI. It inched up to a 9-month high of 51.4 in July but analysts do predict a small correction to 51.0 in August.
United States: FOMC members Williams, Kashkari and Evans to speak
Thursday 5th September
Australia: Trade balance (July)
Switzerland: GDP (Q2). Swiss GDP growth doubled to a respectable 0.6% qoq in Q1 but is forecast to have slumped to just 0.2% qoq in Q2, in part due to the broader European growth slowdown.
United States: ADP non-farm employment (August). This unofficial measure of US employment was back up to trend in July (+156,000) after having collapsed in May and remained weak in June.
United States: ISM non-manufacturing PMI (August). Like its manufacturing counterpart, this index has been on a clear downtrend since Q4 2018. Analysts forecast a slight up-tick in August but even if realised would still point to a slowdown in US GDP growth in Q3.
Switzerland: Swiss National Bank Chairman Thomas Jordan to speak
Friday 6th September
United States: Labour market data (August). The US labour market has remained a bright-spot on US economic landscape, with the economy having created 360,000 jobs (outside the farming sector) in June-July, but hourly earnings growth has flat-lined around 3.1-3.2% yoy since March.
