Who’s up for another trading week filled with top-tier catalysts?
It’s gonna be a busy one with the NFP, U.S. GDP, and CPI reports!
If you’re planning on trading these economic releases, better read up on what market analysts are expecting.
Before all that, ICYMI, I’ve written a quick recap of the market themes that pushed currency pairs around last week. Check it!
And now for the closely-watched economic indicators on the calendar this week:
Global inflation data
Now that most major central bankers have shared their views on inflation trends, it’s time to see if the actual CPI readings back up their outlook.
First up, we’ve got Australia’s CPI (Aug. 30, 1:30 am GMT) lined up on Wednesday, and it’s likely to show a dip from 5.4% to 5.2% in price pressures year-over-year.
This would mark the third consecutive monthly decline in annual inflation, so a weaker than expected result could highlight the RBA‘s plans to keep interest rates on hold for much longer.
Next are the inflation readings from the eurozone, most notably Germany’s preliminary CPI (Aug. 30) and Spain’s flash CPI (Aug. 30, 7:00 am GMT). The former is slated to post another 0.3% month-over-month uptick for August while the latter might show an improvement from 2.3% to 2.5% year-over-year.
The euro region’s flash CPI figures (Aug. 31, 9:30 am GMT) are due the next day, and the headline reading is projected to dip from 5.3% to 5.1% year-over-year while the core figure might fall from 5.5% to 5.3%.
Later that day, the Fed’s preferred inflation measure or the U.S. core PCE price index (Aug. 31, 12:30 pm GMT) is up for release. Another 0.2% monthly uptick is eyed for August, but a lower than expected increase could reinforce expectations of a September pause.
On Friday, Switzerland’s CPI (Sept. 1, 6:30 am GMT) is due and might show a rebound of 0.2% month-over-month after the earlier 0.1% decline.
U.S. preliminary GDP
The dollar could be in for a strong dose of volatility midweek, as Uncle Sam gears up to print the U.S. preliminary GDP reading for Q2 (Aug. 30, 12:30 pm GMT).
No revisions are eyed to the 2.4% quarterly growth figure reported during the advanced release a few weeks back, though, but any downgrades might still bring fresh losses for the Greenback.
The preliminary GDP price index for the same period might also be worth keeping tabs on, as any changes to the initially reported 2.2% figure might impact the U.S. inflation views.
Chinese official PMIs
Market participants had been keeping close tabs on Chinese data, as well as stimulus efforts, in the past few weeks so China’s official PMI readings (Aug. 31, 1:30 am GMT) for August might have a strong impact on sentiment again.
Expectations are for a dip from 49.3 to 49.1 for the manufacturing sector, reflecting a sharper pace of contraction. Meanwhile, the services sector might report a decline from 51.5 to 51.1 to signal a slower pace of growth.
Lower than expected readings could revive calls for more stimulus from the PBOC and the Chinese government, although it’s also worth noting that the latest round of rate cuts failed to impress.
U.S. NFP report
Last but certainly not least is the U.S. non-farm payrolls report (Sept. 1, 12:30 pm GMT) that could trigger another round of big market moves before the end of the week.
Number crunchers are projecting a slower pace of jobs growth at 169K for August versus the earlier 187K increase in hiring. This should be enough to keep the unemployment rate steady at 3.5% for the month.
The average hourly earnings figure is also worth keeping tabs on, as the reading could slow from 0.4% to 0.3% to reflect slower wage growth and weaker inflationary pressures.
Leading jobs indicators, namely the JOLTS job openings, ADP non-farm employment change, and Challenger job cuts lined up throughout the week might also impact dollar direction ahead of the event.