Following the U.S. Federal Reserve’s substantial 50 basis-point interest rate cut, market focus shifts back to US economic data particularly PCE inflation figures will take attention this week. Global PMI data will draw significant attention, along with a rate decision from the Swiss National Bank.
Below are the most important global events likely to affect markets in the week – US PCE & Global PMI Data
JAPAN
- Japanese markets are closed Monday for a national holiday.
- On Tuesday, Bank of Japan Governor Kazuo Ueda will address business leaders in Osaka, a key manufacturing hub. Ueda will take questions from local executives and hold a press conference later in the day.
- September consumer price data for Tokyo, excluding fresh food, will be closely watched on Friday. Core CPI is expected to rise 2.0%, following August’s 2.4%, serving as a key indicator for national inflation trends.
U.S.
- The Federal Reserve’s half-point rate cut in September signals an aggressive easing stance, with analysts expecting two additional cuts in November and December. Markets anticipate a high probability of another 50 basis-point reduction. However, Fed Chair Jerome Powell stressed that future decisions will depend on incoming data, and UniCredit Research pointed out that this larger cut doesn’t necessarily indicate a new pace for reductions.
- S&P’s preliminary purchasing managers’ data for September, due on Monday, is expected to rise to 47.9 for manufacturing and 55.3 for services, from 47.9 and 55.7, respectively. This could result in mixed market sentiment early in the week.
- Tuesday will bring the Conference Board consumer confidence index, forecasted at 103.5, slightly up from 103.3. A lower reading could pressure the U.S. dollar.
- The most closely-watched data will be Friday’s U.S. PCE inflation report for August, expected to remain unchanged at 0.2%. A higher reading could weigh on the dollar.
- Additionally, the third estimate of U.S. second-quarter GDP is set to be released on Thursday, with expectations of 2.9%, down from the previous 3%. Weekly unemployment claims, forecasted at 224,000 from 219,000, will also be closely followed.
- Key data also includes August durable goods, housing market figures, and Treasury auctions.
CANADA
- Canadian gross domestic product data for July are due on Friday.
- The figures might be helped by recent stronger-than-expected retail sales figures for that month, said Olivia Cross at Capital Economics in a note. The data is foreseen at 0.1% from the prvious 0.0%.
- Still, Canada’s economy has looked weak of late. Recent minutes from the Bank of Canada showed officials might be willing to accelerate the pace of rate cuts should weakness in the labor market persist and GDP growth disappoint.
EUROZONE
- Monday’s eurozone provisional purchasing managers’ surveys for September will be key amid uncertainty over further ECB rate cuts in October, following the U.S. Fed’s recent cut. The data is expected at 45.7 vs. 45.8 for manufacturing and 52.3 vs. 52.9 for services, likely having a negative impact on the euro.
- PMIs are expected to show continued weakness in manufacturing, while the services sector loses momentum post-Olympics.
- Other important data includes Germany’s Ifo sentiment survey, GfK consumer climate, eurozone business surveys, and German unemployment figures.
U.K.
- In an otherwise quiet week for U.K. data, focus will center on the release of U.K. provisional purchasing managers’ surveys on manufacturing and services sector activity during September.
- The Flash Manufacturing PMI is foreseen at 52.3 from previous 52.5, while services PMI is foreseen at 53.5 from previous 53.7. Both could have an mixed impact on the pound.
- The Bank of England left interest rates on hold this month and looks set for a slower pace of rate cuts than the Federal Reserve and European Central Bank given a more robust economy.
SWITZERLAND
- The Swiss National Bank announces a decision on Thursday and is expected to opt for a third consecutive cut to the key policy rate of 25 basis points to 1.0%.
AUSTRALIA & NEW ZEALAND
- Markets will focus on the Reserve Bank of Australia’s policy meeting from Monday to Tuesday, but Wednesday’s monthly inflation indicator will take center stage. The RBA is expected to keep rates at 4.35%, maintaining cautious guidance based on incoming data.
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