Week Ahead

Federal Reserve Chairman Powell will speak Friday at the Fed’s annual Jackson Hole, Wyoming, conference, with investors looking for any details on the central bank’s plans for tapering its massive asset purchases program. Other important releases include the ECB meeting minutes, Q2 GDP updates for the US, Mexico and Germany, and flash Markit PMI data for the US, UK, Eurozone, Japan and Australia. Investors also await data on US personal spending and durable goods orders, Eurozone consumer morale, and China industrial profits.

Next week central bankers will be holding their annual gathering at Jackson Hole, Wyoming, with all eyes turning to Federal Reserve Chair Jerome Powell’s speech on August 27th as investors look for any signals about early tapering by the Fed and the outlook for the economy. The central bank’s meeting minutes showed on Wednesday officials agreed last month they could start slowing the pace of bond purchases later this year, and reduce purchases of Treasury securities and mortgage-backed securities “proportionally” so they end at the same time.

It will also be a relatively busy week regarding US economic data. The second estimate of second-quarter GDP is set to confirm the economic recovery remained strong during the April-June period, supported by solid increases in personal consumption and nonresidential fixed investment. In addition, the Markit PMI survey will probably show the US private sector economy expanded at a robust pace in August, although at a slower rate when compared with July. Other notable publications include: personal income and outlays; PCE price index; durable goods orders; new and existing home sales; Chicago Fed National Activity Index; the advance estimates of goods trade balance and wholesale inventories; and the final reading of Michigan consumer sentiment.

Elsewhere in America, important data to follow include Canada average weekly earnings, budget balance and the preliminary reading of wholesale sales; Mexico final estimate of second-quarter GDP and current account, trade balance, unemployment rate, and economic activity; and Brazil current account.

Across the Atlantic, the European Central Bank will be releasing its monetary policy meeting accounts on Thursday, with investors hoping they might provide some clarity on policymakers’ next move. In July, the central bank pledged to keep an accommodative monetary policy stance until inflation “durably” reaches 2% target, which is not expected to happen until at least 2023.

On the economic data front, the flash Markit PMI surveys for the Eurozone and the UK should point to another month of strong expansion in the bloc’s private sector during August; while the bloc’s consumer morale is seen weakening during the same period, moving further away from June’s three-and-a-half-year high. Other key data to follow include: Germany final second-quarter GDP numbers, business and consumer morale; UK CBI factory orders and distributive trades; France, Italy and Turkey business survey.

Meanwhile, China will publish updated figures for January-July’s industrial profits, while investors in Japan will turn their attention to Jibun Bank PMIs and Tokyo inflation. Australia’s second-quarter construction output and private capital expenditure, alongside Markit PMIs for August, will also be keenly watched.

Other key data for the Asia-Pacific region include: South Korea interest rate decision, business and consumer morale; Thailand, Malaysia and New Zealand foreign trade; Taiwan industrial output, retail trade and unemployment data; and Singapore inflation data.

Categories: Markten