(Week of 25th - 30th September 2023)
(Week of 25th - 30th September 2023)
25 September 2023
Monday
The German Ifo Business Climate report is on the agenda for Monday, September 25th, 2023, with its release scheduled for 9:00 AM GMT+1.
EUR - German Ifo Business Climate
Traders watch the German Ifo Business Climate because it's a timely gauge of economic sentiment. Changes can foreshadow spending, hiring, and investment trends.
In August 2023, the German Ifo Business Climate index experienced its fourth consecutive decline, reaching 85.7, the lowest level since October 2022, falling short of the anticipated 86.7. This decline reflected the enduring challenges faced by the economy, including high inflation, escalating interest rates, and weakened global demand. Both current conditions and future expectations decreased, affecting various sectors, including manufacturing, services, trade, and construction.
The forecast for German Ifo Business Climate is reading another decline to 84.8 points.
Make a note of Monday, September 25th, 2023, as the next German Ifo Business Climate report is set to be unveiled at 09:00 AM GMT+1.
26 September 2023
Tuesday
Be prepared for Tuesday, September 26th, 2023, when the CB Consumer Confidence data is scheduled for release at 3:00 PM GMT+1. Anticipate significant market volatility following the announcement.
USD - CB Consumer Confidence
Traders closely monitor CB consumer confidence as it serves as a crucial leading indicator for consumer spending, which, in turn, constitutes a substantial portion of overall economic activity.
Consumer confidence in the economy took a hit in August as The Conference Board Consumer Confidence Index dropped from 114.0 in July to 106.1. This decline reflected how people perceived both the current business and labor market conditions, with the Present Situation Index falling from 153.0 to 144.8. Additionally, consumers' short-term outlook for income, business, and labor market conditions, as measured by the Expectations Index, decreased from 88.0 in July to 80.2 in August. Notably, this index was just slightly above 80, a level historically associated with the possibility of a recession within the next year. Despite some easing of consumer fears about an impending recession, there remained a prevailing belief that a recession could still occur before the end of the year. These shifts in consumer confidence had the potential to impact spending behavior and had broader implications for the overall economic outlook.
The forecast for the US CB Consumer Confidence report is reading a slight decline to 105.9 points.
Mark your calendars, as the next CB Consumer Confidence report is set to be released on Tuesday, September 26, 2023, at 3:00 PM GMT+1. This highly anticipated event is poised to make waves in the world of financial news, as it promises to provide critical insights into consumer sentiment and its potential impact on various markets.
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27 September 2023
Wednesday
Mark your calendars for September 27, 2023, as Australia prepares to unveil its year-on-year Consumer Price Index (CPI). This highly anticipated announcement is poised to make a significant impact on the financial landscape, drawing the attention of analysts and investors worldwide.
AUD - CPI y/y
Consumer prices contribute significantly to the overall inflation rate. The connection between inflation and currency valuation is crucial because when prices increase, central banks tend to raise interest rates to fulfill their mandate of controlling inflation.
According to data from the Australian Bureau of Statistics' Consumer Price Index (CPI), there had been a 4.9% increase in the year up to July, which was a decrease from the 5.4% recorded the previous month and fell below the expected 5.2%. Significantly, the growth in prices for tradable goods had slowed to 1.7%, marking a significant decrease from the nearly 10% growth seen in the preceding year, potentially influenced by global disinflationary trends.
The forecast for Australian CPI y/y is reading an increase of 5.1%.
The upcoming Australian year-on-year Consumer Price Index (CPI) data is set to be released on Wednesday, September 27, 2023, at 02:30 AM GMT+1.
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28 September 2023
Thursday
Mark your calendars for Thursday, September 28, 2023, as a flurry of high-impact announcements is on the horizon. Germany is poised to unveil its German Prelim Consumer Price Index (CPI) month-on-month figures, Spain will release its Flash Consumer Price Index (CPI) year-on-year data, and the United States is set to publish its Final Gross Domestic Product (GDP) quarter-on-quarter figures along with the latest statistics on Unemployment Claims. These crucial updates are expected to capture the attention of global markets and investors, potentially influencing financial landscapes across the board.
EUR - German Prelim CPI m/m
Traders pay close attention because consumer prices make up a substantial portion of overall inflation, a key factor influencing currency valuation. Central banks often respond to rising prices with interest rate adjustments in line with their mandate to control inflation. This underscores the critical importance of inflation data for traders.
In August 2023, German consumer prices remained stable, recording a month-over-month increase of 0.3 percent. This performance was consistent with the growth rate observed in the two months leading up to August.
The forecast for German Prelim CPI m/m is reading an increase of 0.3%, meaning another slight but impactful increase in consumer prices.
The German Preliminary CPI month-over-month (m/m) data is scheduled for release throughout the day on September 28, 2023.
EUR – Spanish Flash CPI y/y
Traders are keenly interested because consumer prices make up a significant portion of overall inflation. Inflation is a critical factor in currency valuation because the central bank often raises interest rates in response to price increases to fulfill their mandate of controlling inflation. This makes inflation data highly relevant to traders.
In August 2023, the flash indicator prepared by the NSI revealed an estimated annual inflation rate of 2.6% for the CPI, marking a three-tenths increase from July’s 2.3%. This shift was primarily attributed to higher fuel prices, along with relatively smaller increases in liquid fuel prices, in contrast to the declines observed in August 2022. Conversely, electricity prices exhibited a milder rise that month, though still less than the increase noted in August 2022. The estimated annual rate of underlying inflation, which excludes non-processed food and energy products, experienced a slight decrease of one-tenth, settling at 6.1%.
The forecast for Spanish Flash CPI y/y is reading an increase of 3.7%, compared to last year.
The Spanish Flash CPI year-on-year data is scheduled for release on Thursday, September 28, 2023, at 08:00 AM GMT+1.
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EUR – Spanish Flash CPI y/y
Traders are engaged because it serves as the most comprehensive indicator of economic activity and is the primary barometer of the overall health of the economy.
In the second quarter of 2023, the US economy grew by 2.1%, a bit lower than the initial estimate of 2.4%, and slightly higher than the first quarter's 2.0% growth. This was mainly because private inventory investment and business spending were revised downward, although government spending was revised upward. Consumer spending and government spending grew more slowly than in the previous quarter, while business investment had its largest increase in nearly a year. However, exports had their biggest drop since the COVID-19 outbreak in 2020, and home construction declined for the ninth straight quarter. Private inventory investment also had a negative impact on the GDP.
The forecast for the US Final GDP q/q is reading an increase of 2.2%, meaning growth for the American economy.
The upcoming Final GDP quarter-over-quarter data is scheduled for release on Thursday, September 28, 2023, at 1:30 PM GMT+1.
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USD - Unemployment Claims
Traders are concerned because, even though it's typically seen as a trailing indicator, the number of unemployed people remains a crucial signal of overall economic well-being. This is because consumer spending is closely linked to labor market conditions. Moreover, unemployment is a significant factor considered by those responsible for shaping the country's monetary policy.
In the week ending September 16, there were 201,000 initial jobless claims, indicating a 20,000 decrease from the revised level of the previous week, which had been revised up to 221,000 from 220,000. The 4-week moving average decreased by 7,750 to 217,000, and the previous week's average was revised up to 224,750 from 224,500. The insured unemployment rate remained unchanged at 1.1% for the week ending September 9, with 1,662,000 seasonally adjusted insured unemployment claims, reflecting a decline of 21,000 from the revised level of the previous week, which had been revised down to 1,683,000 from 1,688,000. The 4-week moving average for insured unemployment decreased by 8,750 to 1,687,000, and the previous week's average was revised down to 1,695,750 from 1,697,000.
The forecast for the US Unemployment Claims is reading an increase to 205,000, meaning more individuals are applying for unemployment benefits.
The upcoming Unemployment Claims are scheduled for Thursday, September 28, 2023, at 1:30 PM GMT+1.
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29 September 2023
Friday
On Friday, September 29, 2023, market volatility is expected as Canada and the US are scheduled to make significant high-impact news announcements. Canada will release its GDP month-over-month (m/m) data, and the US will announce its Core PCE Price Index month-over-month (m/m) as well as the Revised UoM Consumer Sentiment. These announcements are poised to have a substantial impact on market dynamics.
CAD - GDP m/m
Traders are interested because it serves as the most comprehensive measure of economic activity and is the primary indicator of the overall health of the economy.
In an unexpected turn of events, Canada's economy contracted at an annualized rate of -0.2% in the second quarter, prompting the central bank to reassess interest rates. This outcome, falling below expectations, was attributed to declines in housing investment, inventory accumulation, and a slowdown in exports. Consequently, money markets adjusted their expectations for an interest rate hike, leading to a weakening of the Canadian dollar. The Bank of Canada's future decisions were poised to be data-dependent, as inflation had surged to 3.3% in July, despite job losses in the economy. Additionally, GDP for July remained relatively unchanged, and this high-interest rate environment coincided with a decrease in housing investment.
The forecast for Canadian GDP m/m is reading no changes, meaning the Canadian economy has shown no growth over the last month.
The upcoming Canadian GDP month-over-month data is scheduled for release on Friday, September 29, 2023, at 1:30 PM GMT+1.
USD - Core PCE Price Index m/m
Traders are interested because it represents the Federal Reserve's key inflation metric. Inflation holds significance for currency valuation because an increase in prices often prompts the central bank to raise interest rates as a means of fulfilling their mandate to control inflation. This connection plays a crucial role in shaping currency markets.
In July 2023, the US witnessed a 0.2 percent month-over-month increase in Core PCE prices, excluding food and energy. This growth rate mirrored that of June, in line with market expectations. The annual rate, a critical inflation measure for the Federal Reserve, experienced a slight uptick to 4.2 percent from June's 4.1 percent. When factoring in food and energy costs, the PCE price index rose by 0.2 percent compared to the prior month and 3.3 percent compared to the same period in the preceding year.
The forecast for the US Core PCE Price Index m/m is reading an [/B]increase[/B] of 0.2% compared to last month.
The upcoming Core PCE Price Index month-over-month data is scheduled for release on Friday, September 29, 2023, at 1:30 PM GMT+1.
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USD - Revised UoM Consumer Sentiment
Traders are interested because financial confidence serves as a leading indicator of consumer spending, which is a key driver of overall economic activity.
In September 2023, the University of Michigan consumer sentiment for the US dropped to 67.7 from 69.5 in the previous month. This decline continued the retreat from the near-two-year high of 71.6 in July and fell short of market estimates of 69.1. This figure aligned with the ongoing trend of waning optimism seen in other forward-looking indicators. It was consistent with the Federal Reserve's aggressive tightening campaign and challenging data regarding robust growth and the labor market in the earlier part of the third quarter. The gauge for current economic conditions saw a sharp decline to 69.8 from 75.7 in the previous month. Soaring prices for food and fuel had a detrimental impact on consumers' purchasing power and living standards. However, consumers' future expectations improved, rising to 66.3 from 65.5. This was supported by consumers' beliefs that elevated inflationary pressures were likely to ease. Year-ahead inflation expectations also decreased to 3.1% from 3.5% in the earlier month, reaching their lowest level since March 2021.
The forecast for the Revised UoM Consumer Sentiment report is reading no changes with 67.7 points, indicating relative stability in consumer prospects.
The upcoming Revised UoM Consumer Sentiment data is scheduled for release on Friday, September 29, 2023, at 3:00 PM GMT+1.
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30 September 2023
Saturday
CNY - Manufacturing PMI
Traders are intrigued because it serves as a leading indicator of economic well-being. Businesses respond swiftly to market conditions, and their purchasing managers possess the most current and relevant insights into the company's perspective on the economy.
In August 2023, the official NBS Manufacturing PMI in China increased to 49.7 from July's 49.3, surpassing market expectations of 49.4. This marked the smallest decline in factory activity since March, reflecting Beijing's stimulus efforts to bolster economic recovery. Notably, production saw its most significant growth in five months (51.9 vs. July's 50.2), and new orders expanded for the first time in five months (50.2 vs. 49.5). Buying activity also increased for the first time since March (50.5 vs. 49.5), and delivery times shortened the most in six months (51.6 vs. 50.5). Despite this, export sales declined at the slowest pace in three months (46.7 vs. 46.3), and employment continued to decrease for the sixth consecutive month (48.0 vs. 48.1). On the pricing front, input costs rose for the second consecutive month at a faster pace (56.5 vs. 52.4), while output charges accelerated for the first time in six months (52.0 vs. 48.6). Lastly, business sentiment improved, reaching a six-month high (55.6 vs. 55.1).
The forecast for the Chinese Manufacturing PMI is reading an increase to 50.4 points.
In an upcoming news event, the Manufacturing Purchasing Managers' Index (PMI) for China is scheduled to be released on Friday, September 29, 2023, at 02:30 AM GMT+1. This release is anticipated to provide valuable insights into China's manufacturing sector.
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Disclaimer: The market news provided herein is for informational purposes only and should not be considered as trading advice.