Treasuries sold off, as did global stock markets, while the USD rallied, post FOMC, BoE and SNB. The FOMC has more work to do, and prospects for rate cuts next year have been trimmed. BoE and SNB maintained a tightening bias, with BoE in particular now expected to peak much earlier. Next week’s agenda is crucial as it includes the key PCE and US consumer confidence and Eurozone Inflation.
Monday – 25 September 2023
IFO Business Climate, Assessment & Expectations (EUR, GMT 08:00) – The German IFO Business Climate is forecast to fall to 85.3 in September down from 85.7, with Business Expectations a bit optimistic, at 82.8 from 82.6.
Tuesday – 26 September 2023
Consumer Confidence & New Home Sales (USD, GMT 14:00) – Consumer Confidence is expected to bounce to 107.0 after a drop to 106.1 in August from a 2-year high of 114.0 in July, versus a 6-month low of 102.5 in May and a 17-month low of 95.3 in July of 2022. New Home Sales are expected to fall -2.0% to a 700k pace from 714k in July, 684k in June, and 704k in May, versus a 6-year low pace of 543k in July 2022. The home sales metrics have fallen since Q1 2022 due to the steep mortgage rate climb, though elevated prices have left upside pressure on builders to bring products to market despite price cuts and ongoing shortages of labor, materials, and buildable land.
Wednesday – 27 September 2023
Durable Goods (USD, GMT 12:30) – Durable Goods Orders are expected to fall -0.4% in August with a -1.5% transportation orders decline, after a -5.2% headline plunge in July that included a -14.3% transportation orders drop. Durable orders ex-transportation are pegged to rise 0.1%, after a 0.4% July gain. Boeing orders fell to 45 planes from 52, after a 9-year high of 304 in June, with a lift that month from a 220-plane order from Air India previously announced in February, and a big Riyadh Air order from the Paris Air show.
Crude Oil Inventories (USOIL, GMT 14:30)
Thursday – 28 September 2023
German Inflation (EUR, GMT 12:00) – The prelim. Germany Inflation reading for September is expected to hold unchanged at 0.3% m/m leaving the headline lower at 4.5% y/y from 6.1% y/y.
Gross Domestic Product (USD, GMT 12:30) – The Q2 GDP is anticipated to grow to 2.4% from 2.1%, with hikes of $18 bln for net exports, $4 bln for nonresidential structures, $2 bln for public construction, and $1 bln for both residential investment and intellectual property investment, but trimmings of -$6 bln for consumption and -$1 bln each for factory and wholesale inventories. The Q2 revisions will be part of the annual revisions to GDP that are scheduled for the September report. The available Q2 data depict a quarter with solid sales growth led by a 6.1% pace for nonresidential investment, alongside respectable growth of 1.7% for consumption and 3.3% for government purchases.
Fed Chair Powell Speech (USD, GMT 20:00)
Friday – 29 September 2023
Eurozone Inflation (EUR, GMT 09:00) – The prelim. headline Eurozone Inflation reading for September is expected to fall to 4.6% y/y from 5.2% y/y and core at 4.9% y/y from 5.3% y/y.
Personal Consumption Expenditures & Core (USD, GMT 12:30) – We expect a 0.5% August personal income rise after a 0.2% July gain and a 0.6% rise in compensation after a 0.4% gain, given a 0.4% August rise for hours-worked and a 0.2% rise for hourly earnings.
Michigan Sentiment (USD, GMT 14:00) – The revised Michigan Sentiment report is expected to reveal no change to the preliminary headline drop to 67.7 from 69.5 in August and a 2-year high of 71.6 in July, versus an all-time low of 50.0 in June 2022, an 88.3 cycle-high in April 2021, and an early-pandemic bottom of 71.8 in April 2020.
ECB President Lagarde Speech (EUR, GMT N/A)
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Andria Pichidi
Market Analyst
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