The Week Ahead – Economic Data, Geopolitics, and Monetary Policy in Focus

On the Macro

It’s a quiet week ahead on the economic calendar, with just 39 stats in focus in the week ending 11^th September. In the week prior, 78 stats had been in focus.

For the Dollar:

It’s a relatively quiet week ahead on the economic data front.

Key stats include July’s JOLTs job openings on Wednesday and the weekly jobless claims figures on Thursday.

August inflation figures, due out on Thursday and Friday, will also influence.

Expect the jobless claims figures to be the key driver, however.

The Dollar Spot Index ended the week up by 0.38% to 92.710.

For the EUR:

It’s a busy week ahead on the economic data front.

In the 1^st half of the week, Germany is back in focus. Key stats include industrial production and trade figures for July. Expect the industrial production figures to have the greatest influence.

Finalized Eurozone GDP numbers, 2^nd quarter French nonfarm payroll, and August inflation figures are also due out. These will likely have a muted impact on the EUR, however.

While the stats from Germany will influence, the ECB monetary policy decision on Thursday is the main event.

Following the FED change to the monetary policy framework, how will the ECB respond? A stronger EUR for longer would certainly not support a recovery in manufacturing…

The EUR/USD ended the week down by 0.55% to $1.1838.

For the Pound:

It’s a relatively busy week ahead on the economic calendar. In the 1^st half of the week, August’s BRC Retail Sales Monitor figures are due out on Tuesday.

The focus will then shift to a busy Friday. Key stats include industrial and manufacturing production figures and trade data for July.

Away from the economic calendar, Brexit chatter will also influence in the week. Time is running out for both sides to find common ground…

The GBP/USD ended the week down by 0.55% to $1.3279.

For the Loonie:

It’s a relatively quiet week ahead on the economic calendar.

Economic data is limited to August housing starts. We don’t expect too much influence on the Loonie.

The Bank of Canada’s monetary policy decision on Wednesday is the main event. While the BoC is expected to leave policy unchanged, there may be the promise of more support…

The Loonie ended the week up by 0.28% to C$1.3062 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a quieter week ahead on the economic calendar.

While on the quieter side, there are 2 key stats to consider that will have an impact on the Aussie Dollar.

On Tuesday, August business confidence figures are due out ahead of September consumer confidence figures on Wednesday.

In the 2^nd quarter, the economy saw its largest quarterly contraction on record. Wages and hours worked also fell by record levels.

With consumption and business investment key to economic recovery, the stats will give an idea of what lies ahead.

Last week’s GDP numbers may also have veered away from the RBA’s base case scenario…

The Aussie Dollar ended the week down by 1.13% to $0.7282.

For the Kiwi Dollar:

It’s another quiet week ahead on the economic calendar.

Key stats include August electronic card retail sales and business PMIs due out on Thursday and Friday/

Expect both sets of figures to influence in the 2^nd half of the week.

With the Kiwi Dollar particularly sensitive to numbers out of China, China’s trade data will also influence on Monday.

The Kiwi Dollar ended the week down by 0.33% to $0.6721.

For the Japanese Yen:

It is a relatively busy week ahead on the economic calendar.

On Tuesday, July household spending and finalized 2^nd quarter GDP numbers are in focus.

Expect July household spending to garner the greatest interest on the day.

At the end of the week, the BSI Large Manufacturing Conditions Index figures for the 3^rd quarter are due out.

There could be more doom and gloom ahead as Japan continues to struggle…

The Japanese Yen ended the week down by 0.83% to ¥106.24 against the U.S Dollar.

Out of China

It’s a relatively busy week ahead on the economic data front.

Key stats include August trade and inflation figures due out on Monday and Wednesday.

The markets will be looking for a solid set of export and import figures and for inflationary pressures to hold steady.

Any disappointment and then expect riskier assets to take a hit. There are plenty of downside risks lingering amidst the global economic recovery.

The Chinese Yuan ended the week up 0.34% to CNY6.8425 against the U.S Dollar.

Geo-Politics

UK Politics:

There appears to be a continued lack of progress on fisheries that are holding back trade talks.

Pressure on the Pound may begin to build, however, if there really is no hope of a deal… The arm flexing is expected to continue until the eleventh hour…

U.S Politics:

We are expecting a focus on the U.S Presidential Elections to build. It is unlikely to have a material impact just yet, however. That will change once the debates kick-off.

Of greater influence will be civil unrest that could become the greatest threat to the U.S economy.

U.S – China

Trade talks resulted in assurances by China and a ramp-up in soybean imports.

Questions remain, however, over whether the flare-ups are over. China could begin to pull away from holding U.S Treasuries. More importantly, China may also show less interest in auctions that could become an issue for the U.S government…

Trump isn’t holding back either way. After bringing tech stocks into focus, it’s now reportedly onto Chinese scientists.

While the markets can stomach the rhetoric, a serious risk of a complete breakdown in relations lingers…