MNI Global Week Ahead: US Labour Market In Focus

MNI (LONDON) - See here for the key events next week in Developed and Emerging Markets:

Developed Markets

WEDNESDAY - Bank of Canada Decision

In what should be one of its more straightforward decisions of recent months, the Bank of Canada is widely expected to cut its overnight policy rate 25bps for the third consecutive meeting on Wednesday. That said, whilst it’s fully priced to do so, analysts are somewhat more undecided with 8 of 29 looking for no change at 4.5%. A 25bp cut would continue its orderly cutting cycle that started in June and briefly leave policy rates more than 100bps below that of the Fed (although with the latter expected to cut by either 25bp or 50bp later in September). Beyond September, with markets pricing in two additional consecutive 25bp cuts to year-end, we expect main sensitivity to any relatively hawkish tweaks that could indicate a brief pause in either October or December. Pricing for the latter is however likely more susceptible to the labour report for August that follows just two days after as well as CAD CPI on Sep 17.

FRIDAY - US Labour Market Report

Friday’s nonfarm payrolls report for August is set up to be one of the most important single releases in quite some time. With Chair Powell dialling up focus on the labor market at his Jackson Hole speech, it will likely determine whether markets expect a 25bp or 50bp start to the Fed’s cutting cycle on 18th September. Payrolls and other figures from the establishment survey will continue to be important parts of the release but expect even greater focus on the unemployment rate again. Last month’s surprise rise from 4.05% to 4.25% helped spark huge risk-off moves the following Monday, and whilst there has been significant stabilization since then owing to a host of non-recessionary data releases, there is still non-trivial odds of a 50bp cut implied by the 33bp priced for the September FOMC at typing. Consensus looks for an unemployment rate dipping to a rounded 4.2%, no doubt partly because July’s climb in unemployment was down to temporary layoffs. However, with the median FOMC participant judging the long-run unemployment rate to be 4.2%, any further increases could see 50bp cut expectations climb rapidly. The run up to the release will also see continued heightened sensitivity to other labor indicators as well as ISM Services for August on the Thursday. Post-payrolls, markets will keenly await Fed Governor Waller’s speech on the economic outlook at 1100ET for a final Fed steer before the media blackout begins that night ahead of the FOMC decision.

FRIDAY - Eurozone Q2 GDP Final Estimate

Eurozone Q2 GDP is expected to be confirmed at 0.3% Q/Q and 0.6% Y/Y, but most interest will lie in the the various breakdowns of GDP. The ECB has placed a lot of emphasis on the so called "wages-productivity-profits" nexus in determining how quickly it can ease policy. The income-approach to GDP, which allows for an analysis of the GDP deflator and its components (unit labour costs, unit profits and unit taxes) is key in this respect. In Q2, unit profits are expected to continue buffering still-elevated unit labour costs. However, the latter is expected to decelerate on an annual basis thanks to easing compensation growth, helping overall deflator growth moderate as well. These details will feed into the ECB's guidance at its September 12 decision, where a 25bp cut is widely expected.

Emerging Markets

TUESDAY - BCCh Decision (Chile)

Following an unchanged decision in July, both central bank surveys of economists and traders lean towards the BCCh resuming the easing cycle on Sep 03, cutting the policy rate by 25bps to 5.50%. Although softer-than-expected economic activity data supports this thesis, the uptick for both inflation and inflation expectations should leave the option to prolong the easing cycle pause on the table, reflected by the divided Bloomberg survey.

WEDNESDAY - NBP Decision (Poland)

It is highly unlikely that any of the ten members of the MPC will cast their vote in favour of a rate cut, with the National Bank of Poland widely expected to stand pat on rates at least through the end of 2024. That being said, a growing number of members have flagged the potential for interest-rate cuts in 2025, most notably with Governor Adam Glapiński softening his hawkish forward guidance. The official may provide a more formal update on the interest-rate outlook during the press conference, taking stock of weaker-than-expected macroeconomic data at the start of Q3.

THURSDAY - BNM Decision (Malaysia)

Bank Negara Malaysia (“BNM”) is expected to maintain the current policy at 3.00% next Thursday, where some market observers suggest it may remain for some time.  The second quarter release for GDP growth yoy for Malaysia surprised to the upside in August at 5.9% versus 5.8% prior.  Malaysian exports remain very strong growing 12.3% in July, ahead of its peers in the region. Adding to this, data shows domestic consumption is stable and tourist arrivals growing.  Headline inflation in Malaysia was 2% yoy in July, unchanged from June. Core inflation was 1.9% yoy in July, unchanged also.  The BNM stated earlier in the year that they expect higher inflation towards the end of 2024 as fuel subsidies are phased out.  They do however expect that inflation will remain manageable.  Foreign investors have been very supportive of the outlook for the economy with equity and bond market flows being very strong throughout 2024. 

Date	GMT/Local	Impact	Country	Event
31/08/2024	0130/0930	***	CN	CFLP Manufacturing PMI
31/08/2024	0130/0930	**	CN	CFLP Non-Manufacturing PMI
02/09/2024	2300/0900	**	AU	S&P Global Manufacturing PMI (f)
02/09/2024	0030/0930	**	JP	S&P Global Final Japan Manufacturing PMI
02/09/2024	0130/1130	*	AU	Building Approvals
02/09/2024	0145/0945	**	CN	S&P Global Final China Manufacturing PMI
02/09/2024	0615/0815	**	CH	Retail Sales
02/09/2024	0715/0915	**	ES	S&P Global Manufacturing PMI (f)
02/09/2024	0745/0945	**	IT	S&P Global Manufacturing PMI (f)
02/09/2024	0750/0950	**	FR	S&P Global Manufacturing PMI (f)
02/09/2024	0755/0955	**	DE	S&P Global Manufacturing PMI (f)
02/09/2024	0800/1000	**	IT	PPI
02/09/2024	0800/1000	***	IT	GDP (f)
02/09/2024	0800/1000	**	EU	S&P Global Manufacturing PMI (f)
02/09/2024	0830/0930	**	GB	S&P Global Manufacturing PMI (Final)
03/09/2024	2301/0001	*	GB	BRC-KPMG Shop Sales Monitor
03/09/2024	0130/1130		AU	Balance of Payments: Current Account
03/09/2024	0630/0830	***	CH	CPI
03/09/2024	0700/0300	*	TR	Turkey CPI
03/09/2024	0700/0900	***	CH	GDP
03/09/2024	1245/1345		GB	BOE's Breeden moderating ECB and European Banking Authority panel
03/09/2024	1345/0945	***	US	S&P Global Manufacturing Index (final)
03/09/2024	1400/1000	***	US	ISM Manufacturing Index
03/09/2024	1400/1000	*	US	Construction Spending
03/09/2024	1530/1130	*	US	US Treasury Auction Result for 13 Week Bill
03/09/2024	1530/1130	*	US	US Treasury Auction Result for 26 Week Bill
03/09/2024	1700/1300	**	US	US Treasury Auction Result for 52 Week Bill
03/09/2024	1700/1300	*	US	US Treasury Auction Result for Cash Management Bill
03/09/2024	-		CA	Bank of Canada Meeting
04/09/2024	0130/1130	***	AU	Quarterly GDP
04/09/2024	0700/0900		EU	ECB's Elderson at Joint European Banking Authority and ECB conference
04/09/2024	0900/1100	**	EU	PPI
04/09/2024	1100/0700	**	US	MBA Weekly Applications Index
04/09/2024	-	***	US	Domestic-Made Vehicle Sales
04/09/2024	1230/0830	**	US	Trade Balance
04/09/2024	1230/0830	**	CA	International Merchandise Trade (Trade Balance)
04/09/2024	1255/0855	**	US	Redbook Retail Sales Index
04/09/2024	1345/0945	***	CA	Bank of Canada Policy Decision
04/09/2024	1400/1000	**	US	Factory New Orders
04/09/2024	1400/1000	***	US	JOLTS jobs opening level
04/09/2024	1400/1000	***	US	JOLTS quits Rate
04/09/2024	1400/1000		US	MNI Connect Video Conference on the U.S. Fiscal Policy Outlook
04/09/2024	1430/1030		CA	BOC Governor Press Conference
04/09/2024	1800/1400		US	Fed Beige Book
05/09/2024	0130/1130	**	AU	Trade Balance
05/09/2024	0545/0745	**	CH	Unemployment
05/09/2024	0600/0800	**	DE	Manufacturing Orders
05/09/2024	0730/0930	**	EU	S&P Global Final Eurozone Construction PMI
05/09/2024	0830/0930	**	GB	S&P Global/CIPS Construction PMI
05/09/2024	0830/0930		GB	BOE DMP Data
05/09/2024	0900/1100	**	EU	Retail Sales
05/09/2024	0900/1000	**	GB	Gilt Outright Auction Result
05/09/2024	1215/0815	***	US	ADP Employment Report
05/09/2024	1230/0830	***	US	Jobless Claims
05/09/2024	1230/0830	**	US	Non-Farm Productivity (f)
05/09/2024	1400/1000	***	US	ISM Non-Manufacturing Index
05/09/2024	1430/1030	**	US	Natural Gas Stocks
05/09/2024	1500/1100	**	US	DOE Weekly Crude Oil Stocks
06/09/2024	0130/1130	**	AU	Lending Finance Details
06/09/2024	0600/0800	**	DE	Trade Balance
06/09/2024	0600/0800	**	DE	Industrial Production
06/09/2024	0645/0845	*	FR	Industrial Production
06/09/2024	0645/0845	*	FR	Foreign Trade
06/09/2024	0700/0900		EU	ECB's Elderson speech at ESCB Conference
06/09/2024	0900/1100	***	EU	GDP (final)
06/09/2024	0900/1100	*	EU	Employment
06/09/2024	0900/1100	*	IT	Retail Sales
06/09/2024	1230/0830	***	US	Employment Report
06/09/2024	1230/0830	***	CA	Labour Force Survey
06/09/2024	1230/0830	**	US	WASDE Weekly Import/Export
06/09/2024	1245/0845		US	New York Fed's John Williams
06/09/2024	1400/1000	*	CA	Ivey PMI
06/09/2024	1500/1100		US	Fed Governor Christopher Waller
06/09/2024	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly