U.S.
Market will react strongly to August Consumer Price Index (CPI) data, scheduled on Wednesday. On a monthly basis, the CPI is foreseen at 0.6%, while the Core CPI is expected to increase 0.2%. Compared to the previous numbers of 0.2% and 0.2% respectively.
A rate hike by the Fed in September followed by mixed Nonfarm Payrolls numbers and inflation readings are unlikely to alter that view. A stronger than forecasted reading could create probability for hawkish Fed bets or vice versa.
It’s worth reminding readers that the Federal Reserve (Fed) chairman Jerome Powell has stated that the bank expects the economy to cool down and that it will maintain its restrictive monetary policy as long as inflation does not back away.
Other data releases include US retail sales, where early card transaction data is pointing towards slowing real spending growth, especially when considering the higher gasoline prices. The Fed will keep an eye out for the preliminary University of Michigan survey as well, and if the declining trend on inflation expectations continues into September.
Core PPI m/m and Retail Sales m/m will be set to release. Both numbers also have a strong impact on the market. Core PPI is foreseen slightly lower by 0.2% from 0.3% while Core retail sales data expect to shrink by 0.40% from 1.00%.
U.K.
From the UK zone Tuesday and Wednesday will be crucial for the week as the latest jobs report and growth numbers are set to release.
The UK unemployment rate is foreseen at 4.3% in July Vs 4.2% in June, a level last seen one year ago. The unemployment rate has picked up steadily since April this year as more people look to re-enter the workplace, and this should cap wage pressure in the months ahead. While, unemployment numbers were foreseen at 17.1K from 29.0K.
UK growth numbers scheduled to release on Wednesday, will be strongly followed by the Bank of England to see if the lagged effect of 14 months of interest rate hikes is hampering the UK economy.
A below consensus reading expected to have a contraction by 0.2% against a positive figure of 0.50%. That could well see the Bank of England holding interest rates steady at the next MPC meeting later this month.
Eurozone
The main event from the Eurozone will be a round of central bank meetings, scheduled on Thursday. Following the Federal Reserve and Bank of England decision, concerns are rising over the prospect of a bank to keep the rate unchanged at 4.25%.
The ECB has consistently stated that any decision on rates would be driven by the economic data. Looking at the data from Germany has been disappointing last week and yet creating a probability for a rate hike. If the decision is really data dependent, then surely a pause is the way to go, otherwise how can anyone take your guidance with any degree of seriousness.
China
Market might pay more attention to China’s monthly releases on industrial output, retail sales and investment. All numbers set to release on Friday.
Although growth momentum is expected to have remained subdued in August by China’s standards. Industrial production numbers are expected to increase by 3.9% from 3.7%. Also, retail sales numbers may stay positive at 3.0% from 2.5% last month. While, Fixed assets and unemployment numbers expected to stay unchanged from the previous.
India
From the domestic front, CPI numbers and Industrial production numbers are set to release. Where, CPI numbers expected to reduce by 7.0% from previous 7.44%.
Industrial production numbers might have an increment by 4.8% from 3.7%.
WPI numbers are set to release on Thursday, that would have a strong impact on the Indian Currency. The previous reading was at a negative figure at 1.36%.