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September’s Week Ahead: PMI, Rate Decisions, Trade Data & More

Plus500 | Monday 04 September 2023

The month of September continues with key economic releases from some of the world’s biggest economies. From the US to Australia and China to the Eurozone and Canada, here are some of the events that you should keep track of this week:

An illustration of economic charts and data

US Markets Close on Labor Day

Today, Monday, September 4th, is Labor Day, an annual federal holiday in the US. This day celebrates the US labor movement and those who participate in the labor market. 

Since this is a federal holiday, it may be worth noting that the US markets close on this day. As such, bond markets will be closed and the Nasdaq and the New York Stock Exchange will be closed and will reopen at 9:30 a.m.  Tuesday's market reopening will be interesting to watch. 

US PMI & Jobless Claims to Be Released

Although this week marks a shorter trading week for the markets, many market participants may be eyeing this week’s US data releases. The US ISM Purchasing Managers Index (PMI) and the US Jobless Claims data are set to be released this week on Wednesday and Thursday respectively. 

The US Services PMI, which is an index that reflects the health of the manufacturing and services sector, is expected to show a slight downward trend as expectations point toward 52.5 vs. the previous 52.7. Overall, PMI levels over 50 usually indicate growth in the manufacturing sector, but whether or not these predictions will hold true is yet to be confirmed. 

Additionally, the US Jobless Claims can also provide valuable information about the world’s biggest economy. This data, which measures how many people are unemployed within a certain timeframe, has shown that the labor market may be rebounding over the past couple of weeks and is even “near multi-decade lows.” Nonetheless, it remains to be seen whether this favorable trend will continue in Thursday’s release.

Other economic events that can influence the trajectory of the world’s biggest economy are this week’s Federal Reserve speeches which include speakers like Patrick Harker, Susan Collins, John Williams, and Raphael Bostic. Moreover, the Fed’s Beige Book, which includes a review of the economic conditions of the 12 Federal Reserve districts, is set to be released this week on Wednesday. Despite the economic challenges, the Beige Book is expected to show a resilient economy. Evidently, consumer spending remained high in the face of the hawkish Fed rate hikes and inflation. All of the aforementioned releases can not only impact the economy and traders but also the Fed especially ahead of their upcoming meeting on September 19-20.

BoC & RBA: Central Banks Decide on Rates

Central Banks are powerful institutions that influence and affect a nation’s economic trajectory and growth. This week, two Central Banks, the BoC (Bank of Canada), and the RBA (Reserve Bank of Australia), are set to meet and decide on interest rates.

The RBA is scheduled to meet on Tuesday and release its rate decision. While the bank’s monetary policy is still undetermined, the expectations are that the RBA will likely keep its cash rates the same at 4.10% in light of the recent data showing an increase in unemployment as well as inflation missing expectations. 

A day after, the BoC will report its decision, and similarly to the RBA, the former is expected to keep its rates intact. Nonetheless, despite the overarching argument that the rates will remain steady at 5%, it is believed that the bank may also end up raising rates by 25 bps. Analysts also expect a slowdown in Canada’s economy in light of the past rate hikes and a rise in unemployment rates. Traders will have to wait and see what these banks decide and how the markets, in particular the Forex market, will react. 

China Trade Balance: How Is the World’s Second-Biggest Economy Faring?

After a tumultuous year for the Chinese economy, whereby deflation, weakness in the real-estate sector, and a rise in youth unemployment took a heavy toll on the world’s second-biggest economy, traders may have their eyes set on this week’s Chinese trade data. (Source:CNBC)

July’s Chinese trade figures are set to be released on Thursday, September 7th, and while there are currently no black-or-white expectations for Thursday's release, traders may want to note that July’s data was disappointing. Accordingly, in July exports dropped to -14.5% YoY, the lowest level since the COVID pandemic, while imports fell to -12.4% YoY as domestic demand deteriorated. Any positive surprises this week will be interesting to watch, as well as whether the Chinese economy can show some much-needed resilience. 

Moreover, the Chinese CPI is expected to be released on Friday, September 8th, and can be a helpful indicator of inflation and deflation and can impact the People’s Bank of China’s (PBOC) monetary decisions.

Other Economic Releases: Eurozone, Japan & Earnings

This week marks an important one to the Eurozone’s economy as Q2 GDP is expected to be released. In addition, Japan’s wage data and Q2 GDP are scheduled to be released on Friday. Additionally, Germany’s Final CPI will be released that day. 

Other upcoming releases include earnings from companies like Trip.com, C3.ai, and Kroger on Monday, Wednesday, and Friday. These releases can reveal how the markets are faring as well as the factors that may be driving market sentiment. 

Conclusion

To summarize, the upcoming week seems to be exceptionally dynamic for both consumers and traders, with each forthcoming release serving as a valuable indicator of the economic trajectory in the final months of the year.


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