The shortened week starts with the major markets closed for Labor Day, but overcompensates on Wednesday and Thursday with the BoC and ECB rate decisions and Press Conferences, and Inflation from the US. Have a look at the most important events of the coming days in our usual weekly publication.
Monday – 07 September 2020
- Labor Day – US, Canada closed
- Trade Balance (CNY, GMT N/A) – The Chinese trade balance is expected to turn out positive in March, standing at $18 bln, compared to the deficit of $7 billion in February.
- Gross Domestic Product (JPY, GMT 23:50) – Japan is expected to confirm a -8.1% contraction of its economy in the second quarter of the year.
Tuesday – 08 September 2020
- Gross Domestic Product (EUR, GMT 09:00) – GDP is the economy’s most important figure. Q2’s GDP is expected to confirm a contraction to -13.1% q/q and -15% y/y.
- UK Inflation Report Hearings (GBP, GMT N/A)
Wednesday – 09 September 2020
- Consumer Price Index (CNY, GMT 01:30) – The July Inflation was confirmed at 2.7% y/y, above the preliminary number and the 2.5% y/y in the previous month. Now the August number is expected to continue higher to 3.1 % y/y with a rise in the monthly reading at 1.0% y/y from 0.6% last month.
- Event of the week – BoC Interest Rate Decision (CAD, GMT 14:00) – The BoC’s announcement is expected to reveal no change in rates and a reiteration of a whatever-it-takes policy outlook that is shared by the core central banks. The latest jobs report showed that two-thirds of jobs have been recovered, consistent with bank’s view that there is still a long way to go before the economy and labour market return to pre-COVID levels of activity. Overall, a roughly as expected report that supports the recovery story but also highlights the long journey faced by the economy to return to pre-COVID levels of employment and production.
Thursday – 10 September 2020
- Event of the week – ECB Interest Rate Decision & Press Conference (EUR, GMT 11:45 & 12:30) – Even before the negative inflation print, there had been calls for the ECB to move to a more “symmetric inflation target” as part of the ongoing strategic policy review. With the Fed already indicating a shift to an average inflation target and the August HICP rate falling back to -0.2% y/y, the pressure to strengthen the ECB’s commitment to the “low for longer” message has only increased, especially after the rise in the EUR, which clearly has some council members rattled. Against that background the ECB’s policy meeting will be of intense interest for markets and while markets don’t expect a change in overall policy settings, Lagarde is likely to send a dovish signal and hence strengthen the commitment to the “low for longer” stance.
- Jobless Claims (USD, GMT 12:30)– US initial jobless claims dropped -130,000 to 881,000 in the week ended August 29 following the -93,000 drop to 1,011,000 in the August 22 week.
- BoC’s Governor Macklem speech (CAD, GMT 16:30)
Friday – 11 September 2020
- Eurogroup Meeting
- Harmonized Index of Consumer Prices (EUR, GMT 06:00) – The German HICP final inflation for August is anticipated to remain unchanged at -0.1% y/y.
- Consumer Price Index (USD, GMT 12:30) – The August CPI is seen with 0.2% m/m gains for both the CPI headline and core, following 0.6% gains for both in July. The headline will be boosted by an estimated 1.9% August increase for CPI gasoline prices. As-expected August figures would result in a headline y/y increase of 1.2%, up from 1.0% in July. Core prices should set a 1.5% y/y rise, below the 1.6% y/y pace last month. As with PPI, the headline inflation figures continue to be lifted by oil prices. The Fed will have plenty of elbow room for an easing monetary policy over the coming quarters.