Events to Look Out For Next Week

Andria Pichidi

September 8, 2023

US and Europe will monopolize the interest next week with US inflation and the ECB Rate Decision and Statement, with the door still wide open for the ECB. US Inflation is still the main focus ahead of September’s FOMC meeting, with another hike later in the year still on the cards, even if it is a hold in September. Eyes will also be on UK wage data, while growth concerns for China and Europe could continue weighing on confidence.

Monday – 11 September 2023

BOE MPC Member Pill & Mann Speeches

Tuesday – 12 September 2023

Average Earnings Index, Claimant Count & Unemployment Rate (GBP, GMT 06:00) – The Average Earnings excluding Bonus is expected to slow down further to 7.6% for the three months to July from 7.8%. The UK unemployment rate unexpectedly lifted to 4.2% in the three months to June from 4.0% in the previous three month period.
German ZEW (EUR, GMT 09:00) – The key release for the Eurozone’s biggest and most important economy. Data is expected to show September’s ZEW economic sentiment contracting again at -15 from -12.3 after an unexpected improvement in August. The pessimists outnumbered optimists and the current conditions indicator is expected to plunge further into negative territory.

Wednesday – 13 September 2023

Gross Domestic Product (GBP, GMT 06:00) – The UK economy for the second quarter GDP showed an unexpected acceleration in the quarterly growth rate to 0.2% q/q from 0.1% q/q in the first three months of the year. The UK economy has bounced back from the pandemic, however similar to the Eurozone, the UK is facing bigger structural problems, including weak growth in China, higher energy prices, an erosion of disposable income, and labour shortages that have been contributing to the sharp rise in wage growth. The implications for the inflation outlook are not clear cut.
Event of the Week – Consumer Price Index (USD, GMT 12:30) – Inflation in the US is expected to gain by 0.5% for the headline, with 0.2% for the core in August, after July gains of 0.2% for both the headline and core. CPI gasoline prices look poised to jump 9% in August. We expect dissipating upward pressure on core prices through 2023 as disruptions subside from global supply chain bottlenecks and the war in Ukraine. A persistent moderation in y/y gains for all the inflation gauges through 2023 will trim pressure on the Fed to tighten monetary conditions.

Thursday – 14 September 2023

Employment Data (AUD, GMT 01:30) – Australian employment change should grow by 24.3K in August from -14.6K, while the unemployment rate should fall to 3.6% m/m from 3.7%, adding to the RBA’s extended pause decision.
Interest Rate Decision, Monetary Policy Statement and Press Conference (EUR, GMT 12:15 & 12:45) – The ECB’s September decision remains wide open. Growth may be slowing faster than anticipated, but in the current situation that doesn’t necessarily mean that price pressures will ease equally fast it seems. There have been outright calls for additional hikes from the hawks, and while others have sat on the fence, the bias seems to be still slightly in favor of another 25 bp raise in interest rates later this month. Find out more in our ECB Preview Outlook.
Producer Price Index and Core (USD, GMT 12:30) – The August PPI should grow by 0.4% for the headline and 0.2% for the core, after July rises of 0.3% for both. As expected readings would result in the y/y headline PPI metric rising to 1.3% from 0.8%, versus an all-time high of 11.7% in March of 2022. We expect the y/y core measure to fall to 2.1% from 2.4%, versus an all-time high of 9.7% in March 2022. The y/y calculation has fallen sharply through mid-2023 as comparisons have become much easier. Overall, the massive PPI climb since the start of 2021 exceeded the uptrend in headline and core CPI data, and both sets of gains have chased outsized increases in the trade price measures.
Retail Sales (USD, GMT 12:30) – The August Retail Sales should gain 0.3% for the headline and 0.5% ex-autos, after respective July gains of 0.7% for the headline and 1.0% for the core. Energy-led price declines have depressed nominal sales since Q2 of 2022, though we expect a 9% August pop for the CPI gasoline index that will bolster gasoline sales.

Friday – 15 September 2023

Industrial Production & Retail Sales (CNY, GMT 02:00) – The Chinese Industrial Production & Retail Sales is expected to rise in August, with headlines at 4% from 3.7% and 2.8% from 2.5% respectively. Such a reading could ease growth concerns for the Chinese economy a bit.

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Andria Pichidi

Market Analyst

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