Events to Look Out for Next Week

• Labor Day – Markets closed in US and Canada

Tuesday – 07 September 2021

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• Interest Rate Decision and Statement (AUD, GMT 04:30) – After August’s data such as Australia Q2 GDP beat most estimates with a quarterly growth rate of 0.7% q/q, markets are assessing the prospect for central bank action and it seems GDP numbers have prompted some to ditch expectations that the RBA will postpone planned moves.
• Economic Sentiment (EUR, GMT 09:00) – German September ZEW economic sentiment is expected to have decline to 30.0 compared to 40.4 in August.
• Gross Domestic Product (EUR, GMT 09:00) – Eurozone Q2 GDP was confirmed at 2.0% q/q, in line with the preliminary release, but a slightly weaker rebound from the contraction in the first quarter than initially anticipated. The annual rate was revised slightly lower – to 13.6% y/y from 13.7% y/y, with data mainly driven by the different levels of virus restrictions in Q2 this year compared to the same period in 2020. There still is no breakdown with the numbers, but it is pretty clear that consumption was the main driver as economies re-opened.
• Gross Domestic Product (JPY, GMT 23:50) – Gross Domestic Product should impede in Q2 and reveal headline slowdown of -4.8% y/y and -1.2% q/q.

Wednesday – 08 September 2021

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• Interest Rate Decision, Statement and Conference (CAD, GMT 14:00) – Bank of Canada reduced QE to C$2.0 bln per week from the previous C$3.0 bln, matching widespread expectations. Since then officials remain upbeat on the growth outlook, with the 2022 projection nudged up to 4.5% and 2023 at 3.25% even as the 2021 projection was trimmed modestly to 6% due to the fading impact of the third wave of the virus in Q2. The announcement is consistent with hence on September’s meetng expectations are for further reduction in QE to C$1.0 bln by the end of this year.
• JOLTS Job Openings (USD, GMT 14:00) – JOLTS define Job Openings as all positions that have not been filled on the last business day of the month. July’s JOLTS job openings is expected to fall slightly at 9.281M, following the 10.073M in June.

Thursday – 09 September 2021

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• Consumer Price Index (CNY, GMT 01:30) – The August’s Chinese CPI is expected to grow by 0.5% while headline should remain unchanged.
• Interest Rate Decision and Press Conference (EUR, GMT 11:45 & 12:30)  –Central banks may be signaling patience on the rate outlook, but it seems the ECB at least is preparing to scale back asset purchases again after stepping up monthly purchase levels earlier in the year. Activity is set to reach pre-crisis levels earlier than initially anticipated and while much of the current spike in inflation is due to base effects, it seems prudent to at least start to take the foot off the accelerator a bit. Not just comments from ECB heavyweights Guindos and Lane, but also the minutes to the central bank’s last policy meeting have signaled a likely shift in the tone at the September meeting. Not that central bank policy will turn restrictive any time soon and indeed, the central bank’s forceful dovish guidance on rates should give some assurance on that. In fact that minutes indicate that the argument in favour of the strong guidance on the rate outlook also included the consideration that that would help to take the pressure of other policy areas. The focus is shifting back from asset purchases to the report rate as the main signaling tool and as usually dovish central bank officials try to play down the importance of a slightly lower monthly purchase level, the stage seems set for a shift in policy next week. Ultimately fiscal policies will increasingly step in and indeed seem the better option to provide support during the recovery.

Friday – 10 September 2021

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• Producer Price Index (USD, GMT 12:30) – The July PPI is expected at 0.3% and headline to rise with a 0.5% core price gain, following gains of 1.0% for both in July and June. As expected readings would result in an uptick for the y/y headline PPI metric. August looks poised to represent the peak for this metric, especially given the moderation in energy prices into late-August that implies lean September figures.
• Labour Market Data (CAD, GMT 12:30) – Canadian employment rose 94.0k in July, following the 231.0k increase in June. The gain was well short of expectations. The report reflected a lot of the distortions from the pandemic, the lockdowns on the third wave of covid, and the lifting of restrictions. The unemployment rate dropped to 7.5% form 7.8% previously.The labour situation was helped by reopenings in the economy after renewed lockdowns.