- Harmonized Index of Consumer Prices (EUR, GMT 12:00) – The German prelim. HICP inflation for September is anticipated to remain at -0.1% y/y.
- Consumer confidence (USD, GMT 14:00) – Consumer Confidence is expected to rise to 92.0 from 84.8 in August, versus a 6-year low of 85.7 in April. All of the available confidence measures were oscillating near historic highs before being crushed by COVID-19, and throughout the Q2 drop-backs and ensuing bounce, it’s remarkable how firm the consumer measures have stayed relative to prior recessions.
- Trade Balance (JPY, GMT 23:50) – Japanese retail trade is expected to see a strong decline in August, at -8.5% y/y from the downwards revision in June at -2.9% y/y.
Wednesday – 30 September 2020
- Presidential debate – President Trump and Joe Biden will be waging their war of words in person when they take the debate stage in Cleveland on Tuesday for the first of three debates before Election Day.
- Manufacturing PMI (CNY, GMT 01:00) – The NBS Manufacturing PMI is expected to remain neutral at 51.2.
- Gross Domestic Product (GBP, GMT 06:00) – GDP is the economy’s most important figure. Q2 GDP is expected to confirm contraction to -20.4% q/q and -21.7% y/y.
- Retail Sales (EUR, GMT 06:00) – German sales are anticipated to have fallen to 3.4% in August, compared to 4.2% m/m in July.
- Consumer Price Index (EUR, GMT 09:00) – HICP inflation was confirmed at -0.2% y/y, and core at 0.4% in August. The fall into negative territory was largely due to special factors, including the temporary cut to the German VAT rate and the delay of summer sales in some countries. Part of the negative inflation environment is also due to still low energy prices. The Preliminary reading for September is expected to rise at 0.2%y/y and core at 0.7% y/y.
- ADP Non-Farm Employment Change (USD, GMT 12:15) – The ADP Employment survey is seen at 600k for September compared to the 428K in August.
- Gross Domestic Product (USD, GMT 12:30) – A small boost is seen in Q2 GDP growth to -31.6% from -31.7%. Component revisions should include boosts of residential construction, inventories,consumption, and both nonresidential and public construction, but downward revisions for exports, imports and intellectual property. The Q2 GDP data capture the powerful impact of mandatory closures, which left Q2 contraction rates of 20%-40% for most measures of demand, and larger 50%-65% declines for foreign trade.
- Tankan Outlook Indices (JPY, GMT 23:50) – In the case where Tankan indices are below 0, a slowdown in conditions is to be expected. For Q3, the manufacturer index is expected to stand at -23.
Thursday – 01 October 2020
- ISM Manufacturing PMI (USD, GMT 14:00) – The ISM index is expected to ease to 55.0 in September from a 2-year high of 56.0 in August, versus an 11-year low of 41.5 in April, a 14-year high of 60.8 in August of 2018, and a low from the last recession of 34.5 in December of 2008. The all-time low for the measure is 30.3 in June of 1980.
Friday – 02 October 2020
- Retail Sales (AUD, GMT 01:30) – Following the unexpectedly higher than forecast retail sales and industrial production in July, a -4.2% m/m contraction is expected in August.
- Event of the Week – Non-Farm Payrolls (USD, GMT 12:30) – A 900k nonfarm payroll increase is seen in September, after gains of 1,371k in August, and 1,734k in July, and following the -20,787k April collapse. The jobless rate should be steady at 8.4%, versus a 14.7% peak in April. Hours-worked are assumed to grow 0.8% after a 1.2% August gain. Average hourly earnings are assumed to be flat in September, with a headwind as the unwinding of the April distortion from the concentration of layoffs in low-wage categories slows. This translates to a y/y gain of 4.6%, down from 4.7%. We previously saw a 3.5% expansion-high pace for y/y wage gains in both February and July of 2019. We expect the payroll rebound to continue through Q3 as workers are allowed to return to work, but the climb will still leave a net drop for employment for 2020 overall.
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Andria Pichidi
Market Analyst
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