Market Outlook for the Week of 25 – 29 September

Market Outlook for the Week of 25 - 29 September
  • Sunday, 24 September 2023 | 14:52 GMT
  • A quieter week on the economic data front.

After a busy week dominated by crucial Central Bank decisions, the upcoming week appears poised for a more subdued economic events calendar. The FX market could see its dynamics influenced by month-end rebalancing activities.

On Tuesday, key highlights include the release of Japan’s BoJ Core CPI year-on-year data, as well as the unveiling of the CB Consumer Confidence, New Home Sales, and the Richmond Manufacturing Index in the United States.

As we move into Wednesday, the economic calendar remains eventful. On the docket are Japan’s Monetary Policy Meeting Minutes, Australia’s year-on-year CPI figures, and in the United States, the release of Core Durable Goods Orders and Durable Goods Orders month-on-month statistics.

Thursday brings attention to eurozone CPI data and in the U.S., the unveiling of final GDP quarter-on-quarter figures, Unemployment Claims, and Pending Home Sales month-on-month data.

Closing out the week on Friday, Japan’s Tokyo Core CPI year-on-year data and unemployment rate take center stage. Meanwhile, in the United States, all eyes will be on the Core PCE Price Index month-on-month, Revised UoM Consumer Sentiment, and Revised UoM Inflation Expectations.

Throughout the week, various Federal Reserve members, including Fed Chair Powell, are slated to deliver speeches.

As for expectations, the BoJ Core CPI year-on-year is anticipated to dip from 3.3% to 3.2%. However, ING analysts suggest that core inflation, excluding fresh food and energy, may show strength in September, driven by private service prices.

In the U.S., the CB Consumer Confidence is forecasted to decline from 106.1 to 105.5. New Home Sales are also expected to decrease from 714K to 699K, influenced by higher mortgage rates. Builder confidence, as reflected in the NAHB housing market index, has dipped in recent months, correlated with rising mortgage rates, as per Wells Fargo analysts.

Australia’s CPI year-on-year data is expected to rise from 4.9% to 5.2%, mainly due to surging petrol prices and potential increases in food, alcohol, and tobacco costs.

In the U.S., consensus predicts a drop in Core Durable Goods Orders month-on-month from 0.4% to 0.1%, while Durable Goods Orders are expected to decline by 0.5%, following a substantial 5.2% drop in July. The volatile nature of durable goods orders, particularly influenced by aircraft orders, has been evident.

Expectations point to a decrease in both eurozone headline and core inflation, reflecting ongoing economic headwinds. Analysts from ING suggest that despite these challenges, the recent uptick in oil prices may limit the impact on energy inflation.

Keep an eye on U.S. Personal Income and Spending data, with Wells Fargo analysts forecasting a 0.4% increase in the PCE deflator for August and a 0.2% rise in the Core PCE deflator. They also anticipate a 0.5% increase in both personal income and spending, despite looming pressures on real PCE due to a softer labor market, sluggish inflation improvements, and the resumption of student loan payments.

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