Week Ahead – Sep 18th

Next week, the financial landscape will be heavily influenced by the Federal Reserve’s interest rate decision on Wednesday. Additionally, in the United States, all eyes will be on the release of S&P Global PMI figures, as well as several housing indicators, including housing starts, building permits, existing home sales, and the NAHB housing market index. Furthermore, central banks in the United Kingdom, Japan, China, Turkey, Norway, Sweden, Thailand, Switzerland, Brazil, Indonesia, the Philippines, and South Africa will be deliberating on their monetary policy direction. Investors will also closely monitor inflation rates in the UK, Canada, Japan, and South Africa, along with flash services and manufacturing PMI data for France, Germany, the UK, the Euro Area, Japan, and Australia.

The US Federal Reserve is set to convene its monetary policy meeting next Wednesday, and market forecasts suggest that interest rates will remain unchanged at the current level of 5.25%-5.5%, the highest they’ve been since 2001. Investors are also eagerly anticipating the release of the latest FOMC projections, which will provide insight into the potential impact of this unprecedented policy tightening on inflation and the labor market. Shifting our focus to economic data, the preliminary estimate of the S&P Global PMI survey is expected to indicate further deterioration in the US manufacturing sector in September, alongside modest growth in the service sector activity. Additionally, it will be noteworthy to keep an eye on a series of housing-related indicators, including building permits, housing starts, existing home sales, and the NAHB housing market index. Lastly, the second-quarter current account figures, overall capital flows, and the Philadelphia Fed Manufacturing Index will also be released during the week.

In other parts of the Americas, Brazil’s central bank is likely to implement a 50 basis point interest rate cut to 13.25%, continuing its easing cycle initiated in August, despite a slight uptick in inflation last month due to rising fuel prices. Meanwhile, Canada will release data on the inflation rate, retail trade, housing starts, and new housing prices.

In the United Kingdom, the Bank of England is anticipated to implement its 15th consecutive interest rate increase, raising the Bank rate by 25 basis points to 5.5%, the highest since 2008. Just a day before the Bank of England’s rate decision, inflation figures for August are expected to show that consumer prices surged by 7.1%, significantly exceeding the Bank of England’s 2.0% target. Another report is set to indicate a rebound in retail sales for August. However, flash PMI figures are likely to signal a second consecutive monthly decline in private sector output.

Elsewhere in Europe, flash PMIs for the Eurozone, Germany, and France are expected to show a further decrease in both the manufacturing and services sectors activity in September. Additionally, producer prices in Germany are anticipated to increase for the second time in eleven months. Other data to follow include the Euro Area’s final inflation figures; France’s business survey; Spain’s foreign trade and updated GDP data; Switzerland’s balance of trade and current account; and Turkey’s consumer morale. On the monetary policy front, central banks in Norway, Switzerland, Sweden, and Turkey are likely to continue tightening their policies in response to persistently high inflation.

Monetary policy decisions will also take center stage in Asia, with all eyes on the People’s Bank of China’s loan prime rate decision following the surprise reserve requirement ratio slash this week. Interest rate decision will also be the focus in Japan, with hawkish signals on the table after BoJ Governor Ueda suggested that positive interest rates may be appropriate in the long term. Japan will also release September PMI data, and the inflation rate and trade balance for August. Monetary authorities in Indonesia and the Philippines. will also set new interest rates. In Australia, minutes from the RBA’s latest meeting will give further insights on its third consecutive rate hold, which was Governor Lowe’s last meeting. Other key Aussie releases include September’s flash PMIs. Elsewhere, New Zealand will release second-quarter GDP, current account, and August’s trade balance.

Bron: https://tradingeconomics.com