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 |