Week ahead: action until the end of summer
Now that Jackson Hole is over, the focus is once again on the economic recovery. Investors will pay close attention to each data point that can provide insight into the labor market recovery and whether price pressures continue to escalate. A faster path to substantial progress in the labor market could trigger a faster reduction in asset purchases.
The August report is expected to deliver strong 787,000 jobs, which would be lower than the previous month’s 943,000 reading, but still completing the path to the formal announcement of the cut.
Inflationists will be keeping a close eye on Wednesday’s ISM report, which could show input costs remain at high levels as inventories continue to contract. The should soften from 59.5 to 58.7.
The euro area economy is doing well. Common challenges remain, including delta and supply issues, but many countries in the bloc are now among those with the largest vaccine deployments, which positions them well for the final months of the year.
Next week offers a wide selection of data, including the flash CPI and unemployment. The final Manufacturing and Services PMIs will also be released. The ECB minutes this week confirmed the divide within the ECB that we all knew was there, but didn’t offer much on what it means for asset purchases, especially the PEPP which is scheduled to last until the end of March next year.
Data from the UK last week showed that despite the lifting of all restrictions, the economy continued to face headwinds due to labor supply and shortages. There has been an increase in COVID cases in the UK, but hospitalizations and deaths remain very low by past standards.
This week consists of level two and level three data including the final and PMI.
This week sees the release of and PMIs for and.
The central bank previously raised rates to 6.5% and warned more may follow.
A mixed week which saw a surprising increase to 34.4% against 32.6% in Q2. Data could deteriorate further in the third quarter due to new COVID restrictions.
On a brighter note, the economy is 11% larger than expected following a change in the way it is calculated. This means that the deficit and debt as a percentage of GDP will be lower, with the latter now expected to remain below 80% over the next few years, whereas it was previously projected to reach 87.3% in 2024.
This week features a few level three versions.
Plenty of data will be released this week, including Wednesday’s second quarter, which is expected to show the country is up more than 21% from a year ago, when the country faced severe restrictions.
Friday’s data will attract a lot of attention given the pressure on the CBRT governor not to raise interest rates. Forecasts are for a slight drop to 18.7%, in line with the thoughts of the central bank.
If we see a surprise hike above the central bank rate, it could be extremely problematic for Governor Şahap Kavcıoğlu. Does he keep his word and prioritize maintaining confidence in the markets at the expense of risking the bag, or is he coming back and risking the wrath of the markets.
China has announced that the latest outbreak of the COVID Delta variation has been completely contained, saying COVID cases have been reduced to zero. The impact of the epidemic on the Chinese economy should be most evident in the next one. The manufacturing sector is expected to suffer only limited damage as external demand remains robust.
Manufacturing and services PMIs for August will be released earlier this week. Manufacturing activity is expected to stagnate, with a consensus of 50.2 for and. The services sector is expected to expand slightly, with estimates of 52.0 for the non-manufacturing PMI and 51.3 for the.
The China Securities Journal reported that the PBoC plans to boost the supply of credit soon and increase the amount of money that supports small businesses and the real economy. The move follows a decline in credit and economic growth in July.
India has seen an increase in COVID cases, which is attributed to a harvest celebration in southern India. India on Thursday recorded 46,000 cases, the highest daily number for more than a month. Only 10% of India’s population has been fully vaccinated against COVID, meaning the number of new cases of the COVID Delta variation could skyrocket. India’s GDP is expected at 20.9%.
Australia and New Zealand
The government has imposed strict closures, but COVID cases continue to rise. Australia reported more than 1,000 new cases on Thursday, the highest total since the pandemic began in 2020. There are growing fears that the economy will fall into recession if the number of COVID continues to rise. to augment.
The Australian economy posted solid expansion in the first quarter, gaining 1.8% (QoT). However, some fear that growth may have slowed to below 1% in the second quarter. Australia will release its GDP on Tuesday.
The recent outbreak of the COVID Delta variant in New Zealand has led to a nationwide lockdown. The government has announced that the lockdown will be relaxed in all areas except Auckland. , which hit -3.8 in July, will be released on Monday.
Japan continues to fight an upsurge in COVID cases, and the state of emergency will hamper economic growth. Earlier this week, Japan is releasing the and for July. Both indicators are expected to have deteriorated compared to June.
Key economic events
Sunday August 29
Debate between the candidates vying to become the next German Chancellor
Monday August 30
President Joseph Biden meets with Ukrainian President Volodymyr Zelenskiy at the White House
Economic data / Events
- Pending home sales in the United States
- Economic / consumer confidence in the euro zone
- Germany CPI
- Japan Retail sales
- South Africa Monthly Budget Balance
Tuesday August 31
- Tentative deadline for US evacuation in Afghanistan
- ECB Governing Council Members Robert Holzmann and Klaas Knot, Danish Central Bank Deputy Governor Per Callesen and Croatia Central Bank Governor Boris Vujcic speak at a conference in Alpbach, Austria.
- Jonathan Ostry of the IMF gives the annual conference of the Mapungubwe Institute for Strategic Thinking in South Africa, on the theme “Will Covid-19 increase inequalities?” Evidence of past pandemics and crises.
- The Center for Strategic and International Studies is hosting an event titled “A Mission to Mars: A Conversation with Her Excellency Sarah Al Amiri, UAE Minister of State for Advanced Technologies. “
Economic data / Events
- US House Price Index FHFA, Chicago PMI, Conference Board Consumer Confidence
- Canadian GDP
- GDP of the Czech Republic
- Finland GDP, CPI
- French GDP
- India GDP
- Italy GDP, CPI
- Denmark GDP
- Poland GDP, CPI
- Germany Unemployment
- Unemployment Russia
- Eurozone CPI
- Thailand Trade, BoP
- Australia BoP Current Account Balance, Construction Approvals
- Hong Kong retail sales, money supply, budget balance
- Singapore bank loans, money supply
- New Zealand building permits trusted by ANZ companies
- Japan industrial production, housing starts, unemployment
- Mexico Central Bank Quarterly Inflation Report
- UK mortgage approvals, money supply
- South Africa trade balance, money supply
Wednesday September 1
- BOJ Deputy Governor Wakatabe speaks in Hiroshima.
- ECB Governing Council members Holzman and Knot and Bundesbank President Weidmann speak at a Bundesbank symposium.
- Mexican President Andres Manuel Lopez Obrador delivers third State of the Union address.
Economic data / Events
- US manufacturing ISM for August: 58.7 ev 59.5 before, change in ADP employment: 650 Ke against 330,000 before, Markit Manufacturing PMI, construction expenditure
- OPEC + meeting on the exit
- Hungary’s GDP
- Turkey’s GDP
- Australia GDP
- Euro zone unemployment
- Euro zone manufacturing PMIs (Germany France, Italy Spain)
- India Manufacturing PMI
- British manufacturing PMI
- Australia Manufacturer PMI
- Thailand Manufacturing PMI
- South Africa Manufacturing PMI
- Hungary Manufacturing PMI
- China Caixin manufacturing PMI
- Capital expenditure in Japan, vehicle sales, manufacturing PMI
- Australian Commodity Index
- Thailand Business Confidence Index
- EIA Crude Oil Inventory Report
Thursday September 2
- Eastern Economic Forum held in Vladivostok.
- BOJ Board Member Kataoka delivers an online speech to business leaders in Nagasaki, Japan.
Economic data / Events
- Factory orders in the United States, durable goods, trade balance, first jobless claims
- Australia trade balance
- Japan’s monetary base
- Singapore PMI, electronics sector
- New Zealand Terms of Trade Index
- Building permits in Canada
- Eurozone PPI
- Change in unemployment in Spain
- Switzerland GDP, CPI
Friday September 3
The annual European House-Ambrosetti Forum takes place in Cernobbio, Italy
Economic data / Events
- US August Change in non-farm payroll: 787Ke vs. 943K before; Unemployment rate: 5.2% ev 5.4% before
- Eurozone Retail Sales, Markit Services PMI
- UK Services PMI
- Australia Services PMI
- India PMI Services
- Singapore Markit PMI
- China Caixin services PMI
- Japan Banking Services PMI
- Thailand’s foreign reserves, futures
- Retail sales in Singapore
- South Africa PMI