A big week for indicators of economic activity, with Purchasing Managers Indices (PMIs) due out in the UK, US, Australia and Switzerland amongst others and the Eurozone and Switzerland also due to release CPI-inflation and retail sales data for August. The RBA hold its policy meeting tomorrow, with a 25bp rate cut expected. The highlight is probably Friday, with US labour market data out and Fed Chairperson Powell due to speak.
Monday 30th September
United Kingdom: GDP (Q2, second reading). Analysts expect an unchanged figure of -0.2% qoq with the focus now on whether GDP again contracted in Q3 which would put the UK in a technical recession.
Tuesday 1st October
Australia: Reserve Bank of Australia policy meeting and statement. Analysts’ consensus forecast is for the RBA, which cut its policy rate 25bp at both its June and July meetings, to cut rates by a further 25bp to just 0.75% despite evidence of surging property prices in prime locations.
Switzerland: Retail sales (August)
United Kingdom: Manufacturing PMI (September). This index of economic activity in the UK manufacturing sector slumped to a 7-year low of 47.4 in August, igniting concerns that UK GDP may have again contracted in Q3. Analysts forecast the PMI to have slipped further in September to 47.0.
Eurozone: CPI-inflation (September, preliminary data). Headline CPI-inflation was unchanged at 1.0% yoy in August (the low since November 2016) and similarly core CPI-inflation was unchanged at 1.1% yoy – the low-end of a 1.0-1.4% yoy range in place since April 2017. Weak inflation and economic growth prompted the ECB to announce a number of monetary policy easing measures at its last meeting but the pass-through to inflation, if any, will be measured in months. Analysts indeed forecast that measures of Eurozone CPI-inflation were broadly unchanged in September.
United States: ISM manufacturing PMI (September). This forward-leading indicator of US manufacturing activity has been on a downtrend for the past two years but analysts forecast a slight recovery from 49.1 in August to 50.1 in September. The Philadelphia Fed and NY Fed manufacturing indices painted a mixed picture for September.
New Zealand: Trade balance (August).
Wednesday 2nd October
Switzerland: CPI-inflation (August). Swiss headline CPI-inflation has steadily fallen from 1.2% yoy to just 0.3% yoy in the past 12 months but analysts forecast it to have remained unchanged at 0.3% yoy in September. A further fall would arguably up the simmering pressure on the Swiss National Bank to cut its policy rate.
United States: ADP non-farm private sector employment data (September). The precursor to the official labour market data out on Friday.
Thursday 3rd October
Australia: Trade data (August)
Eurozone: Retail sales (August)
United States: FOMC members Evans, Quarles, Mester and Clarida to speak. The most recent Fed policy meeting revealed clear divisions within FOMC members as to whether the US central bank should cut, hike or leave policy rates unchanged going forwards.
United States: ISM non-manufacturing PMI (September)
Friday 4th October
Australia: Retail sales (August).
Australia: RBA Assistant Governor Ellis to speak.
United States: Labour market data (September). As often the case analysts forecast a “middle-of-the road” increase of 145,000 in total (nom-farm) employment. As important will be average hourly and weekly earnings growth, with hourly growth stuck in a 3.1-3.4% yoy range since November.
United States: Federal Reserve Chairperson Powell and FOMC members Bostic, Quarles, Brainard and Clarida to speak. All eyes and ears on Powell as markets try to gage whether the Fed, which has cut its policy rate twice this year, will make it a hat-trick.
