MNI GLOBAL WEEK AHEAD - EM Rate Decisions and Jackson Hole

Developed Markets

MNI (LONDON) - Tuesday - Riksbank Rate Decision

The Riksbank is widely expected to deliver its second interest rate cut of 2024 at its August meeting, bringing the policy rate to 3.50%. The June decision was more dovish than expected, with the revised rate path indicating a relatively high probability of a cut in August, and the policy guidance opening the door to two or three rate cuts in the second half of 2024 (versus guidance of just two cuts at the May decision).

Tuesday - Canada CPI

The Canadian CPI report for July on Tuesday is one of the last major local risk events prior to the Bank of Canada’s next decision on Sep 4. Unlike in the US, markets haven’t moved too far away from pricing what would be a third consecutive 25bp cut after the BoC started its easing cycle in June. It would likely take a particularly large upside surprise to see expectations of a pause but there could be greater sensitivity to the subsequent path, with the market looking for two additional 25bp cuts to follow in October and December for a cumulative 125bp in 2024. Consensus sees headline CPI falling three tenths to 2.4% Y/Y for more firmly within the 1-3% target range, whilst average core measures are seen easing one tenth to 2.65% Y/Y. It’s then followed by retail sales on Aug 23 before GDP for Q2/June the week after on Aug 30, the latter of note with the Bank’s increased focus on preventing a further widening in excess supply.

Wednesday - Preliminary Payrolls Benchmark Revision

The preliminary annual payrolls benchmark revision on Wednesday, taken from more comprehensive QCEW data, should offer a latest estimation of how much payrolls growth might have been overstated back in Q1. As widely flagged, including by Fed Governors Bowman and Cook, the Q4 report put QCEW employment up 1.5% Y/Y in December vs the 2.0% Y/Y shown in the current iteration of nonfarm payrolls over the same period (although there’s a chance that is revised up judging by recent past revisions). The NFP and QCEW measures were similar back in 2Q23 (June saw 2.5% vs NFP 2.4%) but a gap opened up in Q3 (Sept saw 1.5% vs NFP 1.9%). The softer QCEW data is more in keeping with the-then-weakness in the household survey measure of employment, which has since weakened more notably and was just 0.0% Y/Y in latest data for July. This is just the preliminary estimate, with the finalized revision to come until the Jan 2025 payrolls report in February.

Thursday - Eurozone Flash PMIs

The August flash PMI round is due on Thursday. In the Eurozone consensus is for a 0.2 point fall in the services component to 51.7, whilst the manufacturing component is expected to remain at 45.8. This suggests a continuation of the dynamic highlighted by President Lagarde in the ECB's July meeting press conference, with services driving the Eurozones gradual recovery in economic activity. While inflation components (particularly in services) will naturally be in focus, the growth components will also be interesting after President Lagarde seemingly put increased emphasis on downside risks to the Eurozone growth outlook (and net exports in particular) compared to previous press conferences.

Wednesday/Friday Fed Minutes/ Jackson Hole
Fed policy communications will be a key focus in the upcoming week, starting with the minutes of the July FOMC meeting (1400ET Wednesday) which will be eyed for the degree of support on the Committee for a rate cut at the time. Later in the week (Aug 22-24), the annual Jackson Hole Economic Policy Symposium (this year's edition is titled "Reassessing the Effectiveness and Transmission of Monetary Policy") will be held, with the key event being Chair Powell's speech at Friday (1000ET/1500UK). Powell is expected to reiterate his July press conference message that a rate cut "could be on the table as soon as September", thus aligning with market pricing for easing at the next meeting. Expect him to emphasize that the progress made on inflation and rising risks to the employment side of the Fed's dual mandate warrant dialing back the restrictiveness of monetary policy, and he may tie this into the theme of the Symposium by arguing that the lagged impact of earlier tightening is finally being seen in earnest. While he's unlikely to deviate from the script too much - emphasizing data dependence and a meeting-by-meeting approach - any reference to the envisaged tempo of cuts or the eventual destination for rates would be market-moving. In addition to Powell's speech, we will hear from other central bank policymakers, including BoE Gov Bailey (1100ET/1600UK Friday) and ECB Chief Economist Lane (1225ET/1725UK Saturday), with a full official schedule expected to be released Thursday night.

Emerging Markets

Tuesday - CBRT Rate Decision

The CBRT is widely expected to keep its one-week repo rate unchanged at 50% on Tuesday, and instead continue to focus on alternative liquidity draining tools to manage financial conditions. Governor Karahan has repeatedly stated that further steps will be taken to reduce excess lira liquidity in a bid to prevent deposit rates from falling – which could compromise the Bank’s tight stance on monetary policy. Among sell-side, the scope for rate cuts in the remainder of 2024 appears limited.​

Wednesday - Bank Indonesia Rate Decision

​Bank Indonesia announces its decision on Wednesday August 21 and is expected to leave rates at 6.25%. Its focus will remain on FX stability to maintain rupiah appreciation seen since the end of July. USDIDR is now under 15800 and the central bank won't want to risk the gains by easing ahead of the Fed. The US is widely expected to begin its easing cycle at its September 18 meeting. Inflation remains well within the BI's target band and growth is solid at around 5% y/y. BI has been supporting the economy through its macroprudential policy.

Wednesday - Bank of Thailand Rate Decision

The Bank of Thailand's decision is on Wednesday August 21 and it is expected to leave rates at 2.5%. Governor Sethaput has reiterated that current rates and CPI target are "appropriate" as there is little deflationary risk. He was also confident that the central bank's growth forecast would be achieved. So, there is little reason at this point to change rates. BoT has also been monitoring FX and Fed developments but the baht has appreciated since early July against the dollar and blips from recent political events have been unwound.

Thursday - Bank of Korea Rate Decision 

The Bank of Korea meets next week at an interesting juncture in Asia. With markets pricing in a cut for September by the Federal Reserve, Asian Central banks are now in focus as to their next move. In a game of ‘who goes first’ the Philippines BSP cut rates this week citing confidence in declining inflation. For the BOK inflation data has surprised to the upside with CPI exceeding expectations.

Ongoing house price rises in Seoul continue to be highlighted by the Central Bank as a key risk.We therefore anticipate that the BOK will remain on hold at their next meeting but may soften their language, paving the way for a cut later in the year.

Date	GMT/Local	Impact	Country	Event
19/08/2024	2350/0850	*	JP	Machinery orders
19/08/2024	-		GB	DMO to hold quarterly consultation investors / GEMM consultation
19/08/2024	1315/0915		US	Fed Governor Christopher Waller
19/08/2024	1530/1130	*	US	US Treasury Auction Result for 26 Week Bill
19/08/2024	1530/1130	*	US	US Treasury Auction Result for 13 Week Bill
20/08/2024	0600/0800	**	DE	PPI
20/08/2024	0730/0930	***	SE	Riksbank Interest Rate Decison
20/08/2024	0800/1000	**	EU	EZ Current Account
20/08/2024	0900/1100	***	EU	HICP (f)
20/08/2024	0900/1100	**	EU	Construction Production
20/08/2024	1100/0700	***	TR	Turkey Benchmark Rate
20/08/2024	1230/0830	***	CA	CPI
20/08/2024	1230/0830	**	US	Philadelphia Fed Nonmanufacturing Index
20/08/2024	1255/0855	**	US	Redbook Retail Sales Index
20/08/2024	1530/1130	*	US	US Treasury Auction Result for Cash Management Bill
20/08/2024	1845/1445		US	Fed Governor Michael Barr
21/08/2024	2301/0001	*	GB	Brightmine pay deals for whole economy
21/08/2024	2350/0850	**	JP	Trade
21/08/2024	0600/0700	***	GB	Public Sector Finances
21/08/2024	0900/1000	**	GB	Gilt Outright Auction Result
21/08/2024	1100/0700	**	US	MBA Weekly Applications Index
21/08/2024	1230/0830	*	CA	Industrial Product and Raw Material Price Index
21/08/2024	1400/1000	*	US	Services Revenues
21/08/2024	1430/1030	**	US	DOE Weekly Crude Oil Stocks
21/08/2024	1700/1300	**	US	US Treasury Auction Result for 20 Year Bond
21/08/2024	1800/1400	***	US	FOMC Minutes
22/08/2024	2300/0900	***	AU	Judo Bank Flash Australia PMI
22/08/2024	0030/0930	**	JP	Jibun Bank Flash Japan PMI
22/08/2024	0600/0800	**	NO	Norway GDP
22/08/2024	0715/0915	**	FR	S&P Global Services PMI (p)
22/08/2024	0715/0915	**	FR	S&P Global Manufacturing PMI (p)
22/08/2024	0730/0930	**	DE	S&P Global Services PMI (p)
22/08/2024	0730/0930	**	DE	S&P Global Manufacturing PMI (p)
22/08/2024	0800/1000	**	EU	S&P Global Services PMI (p)
22/08/2024	0800/1000	**	EU	S&P Global Manufacturing PMI (p)
22/08/2024	0800/1000	**	EU	S&P Global Composite PMI (p)
22/08/2024	0830/0930	***	GB	S&P Global Manufacturing PMI flash
22/08/2024	0830/0930	***	GB	S&P Global Services PMI flash
22/08/2024	0830/0930	***	GB	S&P Global Composite PMI flash
22/08/2024	1000/1100	**	GB	CBI Industrial Trends
22/08/2024	1130/1330		EU	Account of ECB MonPol meeting in July
22/08/2024	1230/0830	***	US	Jobless Claims
22/08/2024	1230/0830	**	US	WASDE Weekly Import/Export
22/08/2024	1345/0945	***	US	S&P Global Manufacturing Index (Flash)
22/08/2024	1345/0945	***	US	S&P Global Services Index (flash)
22/08/2024	1400/1600	**	EU	Consumer Confidence Indicator (p)
22/08/2024	1400/1000	***	US	NAR existing home sales
22/08/2024	1430/1030	**	US	Natural Gas Stocks
22/08/2024	1500/1100	**	US	Kansas City Fed Manufacturing Index
22/08/2024	1700/1300	**	US	US Treasury Auction Result for TIPS 30 Year Bond
23/08/2024	2301/0001	**	GB	Gfk Monthly Consumer Confidence
23/08/2024	2330/0830	***	JP	CPI
23/08/2024	0600/0800	**	SE	Unemployment
23/08/2024	0645/0845	**	FR	Manufacturing Sentiment
23/08/2024	0800/1000	**	EU	ECB Consumer Expectations Survey
23/08/2024	1230/0830	*	CA	Quarterly financial statistics for enterprises
23/08/2024	1230/0830	**	CA	Retail Trade
23/08/2024	1400/1000	***	US	New Home Sales
23/08/2024	1400/1000		US	Fed Chair Jerome Powell
23/08/2024	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
23/08/2024	1900/2000		GB	BOE's Bailey Speech at Federal Reserve Bank of Kansas
24/08/2024	1625/1825		EU	ECB's Lane in panel at Jackson Hole
25/08/2024	1500/1700		EU	ECB's Cipollone in panel at the Rimini Meeting