Next week’s calendar includes two Central Bank announcements (the RBA and RBNZ), however the crucial events of the week are the Nonfarm Payrolls and the possibility of a government shutdown. Please note that implied Fed funds futures eased slightly to show about a 41% chance for a November 1 rate hike, down from about 50-50 early in the week thanks to expectations a government shutdown will leave the FOMC without key data reports.
Monday – 02 October 2023
ISM Manufacturing PMI (USD, GMT 14:00) – The ISM index is expected to fall to 47.0 from 47.6 in August and a 3-year low of 46.0 in June. We saw an 18-year high of 63.7 in March of 2021, an 11-year low of 41.6 in April of 2020, and an all-time low of 30.3 in June of 1980.
Fed Chair Powell, FOMC Member Harker and Williams Speeches (USD, GMT 15:00)
Tuesday – 03 October 2023
Event of the Week – RBA Rate Statement & Cash Rate (AUD, GMT 03:30) – The minutes to the RBA meeting showed that officials considered another 25 bp hike at the last meeting, before deciding to await more data. That leaves the risk of additional tightening on the table. Meanwhile, a Reuters poll of economists found that Australia’s central bank will hold its key interest rate steady at 4.10% on Tuesday but hike it to a peak of 4.35% next quarter as inflation remains above target.
Wednesday – 04 October 2023
OPEC Meeting (All Day) – The OPEC meeting will be held in Vienna and is attended by representatives from 15 oil-rich nations.
RBNZ Rate Statement & Cash Rate (NZD, GMT 01:00) –
The RBNZ scheduled to occur 24 hours after the RBA makes its own decision. The prevailing expectation is that the RBNZ will maintain its official cash rate at 5.5%. What’s crucial in this context is the communication strategy employed by both central banks. Should the RBA’s statement convey a more cautious approach to monetary policy when contrasted with the RBNZ’s statement, it has the potential to result in a comparatively weaker Australian Dollar in relation to the New Zealand Dollar.
ECB President Lagarde (EUR, GMT 08:00)
ADP Employment Change (USD, GMT 12:15) – The key private payrolls number is expected to climb to 150K (27k lower than last month’s reading).
ISM Non-Manufacturing PMI (USD, GMT 14:00) – The ISM-NMI index should drop to 53.0 from 54.5, versus a 3-year low of 49.2 in December, an all-time high of 68.4 in November of 2021, an 11-year low of 41.8 in April of 2020, and an all-time low of 37.8 in November 2008. Producer sentiment has stabilized around lean levels in 2023, after a big pull-back from robust peaks in November of 2021, with many of the various component categories in contraction territory. Producers are facing big headwinds from elevated interest rates, tightening credit conditions, and recession fears, but have benefited from the need to rebuild retail inventories following a prolonged period of supply chain disruptions.
Thursday – 05 October 2023
Trade Balance (AUD, GMT 00:30) – The August Trade Balance in Australia is anticipated to surplus at 9bln from 8.03bln.
Trade Balance (USD, GMT 12:30) – The trade deficit is expected to widen to -$65.5 bln in August from a -$65.0 bln gap in July, versus a -$74.4 bln gap in April that was the widest since October, and a lofty all-time wide of -$107.7 bln in March of 2022.
Friday – 06 October 2023
Event of the Week – Non-Farm Payrolls (USD, GMT 12:30) – A 140k September Nonfarm Payroll increase is anticipated after gains of 187k in August, 157k in July, and 105k in June. Initial claims fell in September after an August bounce, while continuing claims remain tight. We expect the jobless rate to tick down to 3.7% from 3.8% in August, versus a 54-year low for the two-digit rate of 3.39% in April. Hours-worked are assumed to be flat after a 0.4% August rise, while the workweek ticks down to 34.3 from 34.4 in August. Average hourly earnings are assumed to rise 0.4%, after a 0.2% gain in August, while the y/y wage gain should hold at 4.3% for a second month. In the last expansion, we saw a 3.5% peak for y/y wage gains in both February and July of 2019, before the pandemic-boost to an 8.0% peak in April of 2020. The ensuing strength in wage gains has allowed continued robust y/y increases, though the return of low-paid workers to the workforce is likely restraining wage increases.
Fed Waller Speech (USD, GMT 16:00)
Click here to access our Economic Calendar
Andria Pichidi
Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
