Today’s economic news offers some compelling insights.
The market witnessed intense volatility last week, driven by a surge of economic data and the ECB’s policy decisions. Now, brace yourself for a high-stakes showdown as the Fed, Bank of England, and Bank of Japan hold their policy meetings this week.
U.S. Federal Reserve
The U.S. Federal Reserve is widely expected to begin its long-anticipated easing cycle with a 25 basis-point reduction, lowering the federal funds rate to the 5.00%-5.25% range at its Sept 17-18 policy meeting. This outcome is seen as slightly more likely, though only marginally so.
The market impact will hinge on the Fed’s economic projections, statement, and press conference. Additionally, a busy data schedule is expected, including retail sales, industrial production, housing data, weekly jobless claims, and the Philly Fed Index. Philadelphia Fed President Patrick Harker is also scheduled to speak on Friday.
Bank of England
The Bank of England is expected to leave rates unchanged at 5.00% during its meeting on Thursday, with markets pricing in a 69% chance of no change. However, markets anticipate a 30 basis-point cut in November and 51 basis points by December.
Focus will be on the monetary policy summary and press conference. The release of the UK’s CPI (forecast 2.2% from previous 2.2%)and PPI on Wednesday could shift expectations, and retail sales data (forecast 0.4% from previous 0.5%) on Friday will also be closely watched.
Bank of Japan
Japan begins the week with a holiday on Monday but returns to a full schedule with machinery orders, trade data, and CPI figures due, leading up to the Bank of Japan’s policy decision on Friday.
The BOJ is expected to keep rates on hold at 0.25%, with another hike potentially coming in 2024. The press conference will be critical for setting expectations.
Major Economic News, Data and Event scheduled today
Eurozone
Eurozone data this week is relatively light, with final August HICP, flash September consumer confidence, and the German ZEW survey being key releases. However, a number of European Central Bank officials, including President Christine Lagarde, are scheduled to speak.
China
China is likely to keep its one-year and five-year Loan Prime Rates (LPRs) unchanged on Friday, despite rising expectations for additional support measures aimed at stabilizing the struggling property market. August saw new home prices fall at their fastest pace in over nine years.
Above mentioned economic news and data could have a negative impact on the pound.
Canada
Canada will release CPI (forecast 0.1% from previous 0.4%) on Tuesday, retail sales (forecast 0.3% from previous -0.3%), on Friday this week.
The Bank of Canada will publish its September policy meeting summary on Wednesday, and Governor Tiff Macklem is scheduled to speak on Friday.
Above mentioned economic news and data could have a volatile impact on the dollar.
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