- September 9, 2022
- Posted by: AliensFaith
- Category: OBJECTIVE PRESS
No Comments
Central banks may have front-loaded the tightening cycle, but it doesn’t seem as though the ECB’s bumper 75 bp hike and mounting speculation of a super-sized Fed and BOE move has impacted the overall tightening markets are expecting. In the UK, the BoE announced that the rate decision scheduled for next week has been postponed to September 22, as the nation prepares for Queen Elisabeth’s funeral. Russia has escalated the European energy crisis by failing to restore flows. PM Truss announced a series of measures mainly designed to limit the costs for consumers, but as in the EU there is also the discussion on how and if to break the link between gas prices and electricity costs. Have a look at the most important events of the coming days in our usual weekly publication.
Monday – 12 September 2022
- Gross Domestic Product, Industrial & Manufacturing Production and Trade balance (GBP, GMT 06:00) – GDP contracted -0.1% q/q in the Q2 of the year, in line with our forecast and a tad less bleak than Bloomberg consensus, which predicted a contraction of -0.2% q/q. The -0.6% m/m decline in the monthly GDP number for June was sobering though and backed the BoE’s bleak outlook for the economy, which seems to be heading for a recession amid the cost-of-living crisis, the fallout from Brexit and political turmoil in Westminster. Data for June though showed industrial production down -0.9% m/m and construction output down -1.4% m/m, while the index of services contracted -0.5% m/m which suggests broad based risks to growth, even if the numbers were not quite as bad as feared. In July, these numbers expected to worsen with industrial production at -1.3% m/m and manufacturing at -1.8% m/m.
Tuesday – 13 September 2022
- Employment change & ILO rate (GBP, GMT 06:00) – UK Earnings with the bonus-included and ILO unemployment figures are expected at 5.2% (3 Mo/y) and 3.7% respectively.
- German ZEW (EUR, GMT 09:00) – The key topic for the Eurozone’s biggest and most important economy. Data is expected to show September’s ZEW economic sentiment contracting further at -59.5 from -55.3.
- Consumer Price Index (USD, GMT 12:30) – The August CPI is forecasted at -0.1% headline drop, alongside a 0.4% rise for the core, following July figures of zero and 0.3% respectively. CPI gasoline prices look poised to fall -10% in August. We see ongoing support for core prices from the war in Ukraine and continued global supply chain issues, with the associated disruption to global trade. As-expected August CPI figures would result in a pullback in the y/y headline rise to 8.0% from 8.5% in July, versus a 40-year high of 9.1% in June.
Wednesday – 14 September 2022
- Consumer Price Index and Core (GBP, GMT 06:00) – Inflationary pressure expected to continue with August inflation to rise further to 10.4% from 10.1% in July. The CPI number is now at a 40-year high and that before the energy regulator adjusts its price cap later in the year, which will see energy bills rising sharply. There was some sign of easing pressure as input price inflation eased slightly, although output price inflation continues to rise as previous cost increases feed through the product chain. The outlook for the UK economy is looking increasingly bleak and going on confrontation course with the EU over Northern Ireland as Liz Truss is set to do, will only add to the country’s problems. There is already widespread strike action and as disposable income is eroded public discontent is likely to grow, with many expecting another “winter of discontent”.
- Producer Price Index and Core (USD, GMT 12:30) – The August PPI gains are seen unchanged for the headline and 0.2% for the core, following respective figures of -0.5% and 0.2% in July. As expected, readings would result in the y/y headline PPI metric easing to 8.8% from 9.8%, versus an all-time high of 11.6% in March. Overall, the massive PPI climb since the start of 2021 exceeded the uptrend in headline and core CPI data, and both sets of gains have chased outsized increases in the trade price measures. Now as prices unwind, the trade price measures are falling sharply, followed by substantial weakness in PPI and CPI.
- Gross Domestic Product (NZD, GMT 22:45) – GDP for Q2 is expected higher at 0.8% q/q from -0.2% q/q.
Thursday – 15 September 2022
- Employment and Unemployment Rate (AUD, GMT 01:30) – The Australian jobs market is expected to show a positive employment report once again, with 50k jobs in August while unemployment is anticipated to remain steady at 3.4%.
- Retail Sales and Phily Index (USD, GMT 12:30) – August Retail sales are expected flat for the headline and the ex-auto measure, after July figures of unchanged and 0.4% respectively. An August pullback in prices will depress nominal sales, and we expect a -10% decrease for the CPI gasoline index that will weigh on gasoline sales. The Philly Fed index is expected to fall to -1.0 after bouncing to 6.2 in August, versus a 48-year high of 50.2 in April of 2021. The various producer sentiment measures have moderated through 2022 from remarkably lofty peaks for most measures last November, with readings for some measures in contraction territory, though with most of the component indexes still at positive levels. Producers are facing big headwinds from soaring interest rates and moderating economic growth, but have benefited from higher prices despite rising input costs, and the need to rebuild inventories into 2022 after stimulus-induced 2021 sales surge.
Friday – 16 September 2022
- Retail Sales (CNY, GMT 02:00) – Headline Chinese retail sales for August is expected to have increase to 4% y/y from 2.7% y/y.
- Retail Sales (GBP, GMT 06:00) – UK retail sales and core for August are expected to have deteroriated further to -0.6% m/m and -0.7% m/m respectively.
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.
