- Monday: US
and Canada Holiday.
- Tuesday: China
Caixin Services PMI, RBA Policy Decision.
Eurozone Retail Sales, US ISM Services PMI, BoC Policy Decision.
- Thursday: China
Imports/Exports data, Switzerland Unemployment Rate, US Jobless Claims.
- Friday: Japan
Wage data, Canada Jobs Report.
The RBA is expected to keep the cash rate
unchanged at 4.10% as the economic data heading into the meeting surprised
to the downside. In fact, the jobs
report showed a jump in the unemployment rate (although still within the
1-year range), the wages
and the inflation
data missed expectations, and the PMIs
remain in contraction.
The US ISM Services PMI is expected to
tick lower to 52.5 vs. 52.7 prior. The S&P
Global US Services PMI released two weeks ago missed expectations by a big
margin and the comments from the Chief Business Economist do not look rosy on
the outlook as he stated that: “A near-stalling of business activity in
August raises doubts over the strength of US economic growth in the third
quarter. The survey shows that the service sector-led acceleration of growth
in the second quarter has faded”.
The BoC is expected to keep rates unchanged
at 5.00%, although there’s a good chance that they decide to raise rates by 25
bps. In fact, the Canadian underlying inflation measures, which is what the
central bank is currently focusing on, beat expectations in the latest inflation
report, while the labour
market report showed a big jump in average hourly earnings, although it was
accompanied by another increase in the unemployment rate. The BoC might even want
to skip this meeting and see more data before deciding whether another rate hike is needed.
The US Jobless Claims remains a key labour
market report as the Fed and the Market are particularly focused on the jobs
data. Last week, we saw a beat in Initial Claims but a miss in Continuing Claims,
which lag Initial Claims by a week and show how fast people are able to secure
jobs after getting unemployed. The consensus this week sees Initial Claims at
235K vs. 228K prior and Continuing Claims at 1715K vs. 1725K prior.