What will be moving markets this week? Get insights about market trends for this week with HotForex's 11-15 September Weekly Forex market Forecast.
11 September, HotForex - The French term “force majeure” literally translates as “greater force,” a legal clause that is included in contracts to remove liability for natural and unavoidable catastrophes. Looking ahead to the aftermath of back-to-back major hurricanes on both the Gulf and Florida coasts, there may be no escape from the human and economic disruption inflicted on those regions.
Also the economic wreckage that is likely to make studying the economic outlook more of a dismal science near-term. In addition, Equifax’s cyber attack and data breach of 143 mln credit monitoring customers represents another potentially chilling temporary hit to economic and financial well being.
11-15 September Weekly Forex market Forecast
In addition, ongoing North Korea brinkmanship, recent Trumpian bipartisanship, the gold surge/dollar index collapse to post-election levels and skidding yields, all smack of a perfect storm for the Fed into the September 19-20 meeting. The U.S. economic calendar starts off fairly leisurely, building with inflation data by midweek and followed up with flurry of retail, Empire, production, inventory and U. Michigan sentiment data Friday.
The CPI is expected to post respective gains of 0.3% and 0.2% for the headline and core figures for August. Retail sales are estimated edging up 0.1% overall, and up 0.5% ex-autos. Industrial production is expected to rise 0.2% in August, but estimates ranged from 0.6% to -0.6%. NFIB small business optimism and JOLTS job openings are due (Tuesday).
Market moving events in the United States
- MBA mortgage series is on Wednesday, EIA and PPI, which is set to rebound 0.3% for August from -0.1%, while the core reading is seen up 0.2% from -0.1%.
- Meanwhile, the Treasury budget gap is expected to widen to -$131.0 bln in August from -$42.9 bln previously, this data will go live on Wednesday.
- US CPI data will be a focal point (Thursday), forecast to rebound 0.3% in August from a 0.1% reading in July.
- Initial jobless claims may retrace their steps -8k to 290k (Thursday) following the 62k surge to 298k after Harvey, before being distorted again by Irma’s impact, making a wreck of underlying employment trends for some time to come.
Canada fundamental market events
In Canada, this week is all about housing, with four reports distributed across the week. August housing starts (Monday), are expected to edge lower to a 220.0k pace from 222.3k in July. The Teranet/National Bank HPI for August is due Wednesday. The July new housing price index (Thursday) is seen rising 0.2% m/m after the matching 0.2% gain in June. Existing home sales for August are expected on Friday.
The “Bank of Canada’s Re-Examining the Conduct of Monetary Policy: Towards the 2021 Inflation-Target Renewal Workshop” will take place on Thursday. Looking further ahead, Deputy Governor Lane delivers a speech on September 18, while Governor Poloz speaks on September 27.
Europe Fundamental events analysis
With the ECB decision on the future of asset purchase deferred until October, and no data releases scheduled that could change the outlook decisively, this should be a relatively quiet week, leaving markets to focus on geopolitics. Asset purchases will continue at the current pace until the end of the year and even if Draghi announces in October that purchase volumes will be scaled back from January.
The fact that the ECB’s balance sheet continues to expand and that the central bank remains extremely reluctant to commit to an end data for QE means monetary policy should remain accommodative for some time to come and rate hikes are unlikely to become an issue before 2019.
Data releases this week mainly focus on final inflation readings for August and are not expected to bring a major surprise, with higher oil and food prices the main reasons for the uptick in headline rates. The German HICP (Wednesday) expected to be confirmed at 1.8% y/y, the Spanish headline rate (Wednesday) to come in at 2.0% y/y and final French and Italian numbers (Thursday) to confirm preliminary readings of 1.0% y/y and 1.4% y/y respectively. The data calendar also has Eurozone industrial production data for July. Events include a German 10-year Bund sale on Wednesday.
Financial markets drivers in the UK
UK financial markets so far is on Brexit discussion ride:
- BoE Monetary Policy Committee meeting: The calendar this week is highlighted by the September BoE Monetary Policy Committee meeting on Thursday. No change is expected, albeit with the two dissenters from the previous two meetings, Saunders and McCafferty, repeating their votes for a 25 bp hike in the repo rate to reverse the post-Brexit “emergency” cut and return the repo to 0.5%. Data this week will be highlighted by the August inflation report (Tuesday).
- UK CPI data: The headline CPI rate expected to pick up to 2.8% y/y from 2.6% in July. Such outcome would be inline with BoE projections, which policymakers see as a temporary period of above-2%-target inflation. Having been induced by the sharp depreciation of the pound in the wake of the vote to leave the EU in in late June 2016.
- UK Labor data: Monthly labor data covering July and August is also due Wednesday
- UK retail sales: Official retail sales data for August is due Thursday, and a tepid growth of 0.2% m/m is anticipated after 0.3% in the month prior.
New Zealand financial market drivers
New Zealand’s calendar is again sparse in terms of top tier data. August food prices are due Wednesday, which may be of minor interest. GDP for Q2 is due on the 21st of this month. The Reserve Bank of New Zealand meets next on September 28, in which no change to the current 1.75% rate setting through year-end, is expected.
Market moving events in Japan
In Japan, July machinery orders (Monday) are seen rebounding 4.0% m/m from the 1.9% drop in June. previously. This would be the first increases in three months. The July tertiary industry index (Monday) is expected up 0.2% m/m from unchanged in June. This service sector index has increased only once so far this year, climbing 1.4% in April. The September MoF business outlook survey (Wednesday) is forecast to improve to 5.0 from -2.9. August PPI (Wednesday) should heat up to 2.9% y/y from 2.6% previously. Revised July industrial production will be released on Thursday. The preliminary reading fell -0.8% versus June’s 2.2% increase.
China Market Outlook
China August industrial output (Thursday) is expected to be 6.5% y/y vs. 6.4% after gains in the manufacturing PMIs. August fixed investment is likely to have slowed to an 8.1% y/y rate from July’s 8.3%. August retail sales should accelerate to a 10.6% y/y pace from 10.4% previously.
Australia Fundamental events analysis
A thin calendar is highlighted by employment (Thursday), expected to reveal a 20.0k gain in August after the 14.0k rise July. The unemployment rate is projected at 5.6%, matching the 5.6% in July. The Reserve Bank of Australia’s Deputy Governor Guy Debelle speaks at a Workshop at King & Wood Mallesons, Sydney (Thursday).
11-15 September Weekly Forex market Forecast article was written by Andria Pichidi, the Senior Market Analyst at HotForex. This article is provided as a general marketing communication for information purposes only. It does not constitute an independent investment research. Nothing in this communication contains an investment advice or an investment recommendation. It also does not contain a solicitation for the purpose of buying or selling of any financial instrument.
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