DM Data Weekly Sep 7-11

Pivotal for the week ahead could be the latest US inflation data, especially after Fed’s Waller indicated that, for him at least, these prints would be crucial for determining how he votes at the Sep FOMC meeting, making it a lot more data-dependent than perhaps Fed Warsh’s earlier speech had implied. We see upside risk with core at 0.3%. Other major focus of course is the ECB meeting, although here attention will be more on the forecasts and the presser rather than the outcome, with a hike 100% priced in.

USA

US data focus will be on inflation, which may prove crucial for the September 16 FOMC decision. August PPI is due on Thursday and August CPI is due on Friday. We expect both to show monthly gains of 0.4%, and 0.3% ex food and energy, though for the core CPI we expect the rise before rounding to be only 0.26%, with a rebound in lodging away from home pushing the rise to 0.3% after rounding.

Thursday also sees weekly initial claims, August existing home sales, where we expect a 2.0% decline to 3.98m, and July wholesale sales. Friday sees the preliminary September Michigan CSI. Monday sees the Labor Day holiday. Tuesday sees August’s NFIB small business optimism survey and July consumer credit. Wednesday’s calendar is quiet. Fed officials will be quiet ahead of the September 16 decision.

CANADA

Canada’s data calendar is quiet but retaliatory tariffs on the US are due to be imposed on Tuesday. If they are imposed further escalation from the US will be a risk. A deal should not be ruled out.

Eurozone

Next week’s key event is the ECB’s monetary policy decision and the post meeting conference in which the Bank is widely expected to increase the deposit rate by 25bp to 2.5%. The September 10 meeting follows this week’s jump in headline CPI print to 3.3% in August though the ECB may take some comfort in the slight moderation in core CPI to 2.4%. The latter easing as price pressures in the Services sector cooled somewhat. Stronger-than-expected economic resilience is likely to give hawks justification to tighten policy further. We expect the ECB to hike once and then to remain on hold for the rest of this year. With public finance woes and surging bond yields we don’t think the ECB will want to add more fuel to the fire.

Other data includes German industrial production Monday (mkt 0.3%), along with final revised Q2 EZ GDP, and final German CPI Thursday.

Sweden has flash Aug CPI on Monday and this is of background interest given that Swden has been amongst the ‘low CPI outliers’ which is topical as the market has been mulling and enacting carry switches as part of the BoJ/yen reset.

UK

A light data week with July monthly GDP released on September 11. The economy grew 0.3% m/m in June and by 0.4% in the 3 months to June relative to the three prior months. BoE’s Bailey along with Ramsden, Greene, and Taylor appear at the TSC testimony and comments there will be scrutinised to see if the lean remains in favour of ‘wait and see’ pause from the Bank.

JP

We have GDP on Monday. It is unlikely there will be a significant revision from preliminary, though a small downward revision may persist. There are also PPI on Thursday. Else, there are scattered tier two data, while BoJ’s Masu is scheduled to speak Thursday.

AU

ANZ Job Ads on Monday, Business Confidence on Tuesday will not be as important as inflation expectation on Thursday. We expect the read remain high but probably slightly below the August read. RBA’s Hunter and Hauser are the scheduled speakers.

NZ

Only Business PMI On Thursday for NZ. RBNZ’s Silk and then Breman speak Wednesday-Thursday and will be watched after the last meeting was received as a less-hawkish hike.