Week Ahead – US inflation key, ECB ponders rate pause, UK labor market data


This week is all about the US CPI report and retail sales data. If the US demand for goods didn’t weaken that much and if inflation heated up, rate hike expectations for the November meeting might become the consensus.  The inflation report might not be as clear as headline inflation will obviously rise given the surge in gasoline prices, but core might deliver another subdued reading.  Moderation with consumer spending will be the theme as Americans deal with higher energy prices, rising debt levels, and as confidence softens.  

Investors will also pay close attention to the University of Michigan’s inflation expectations on Friday. The 1-year outlook for prices may drop from the 3.5% August reading.  Fed speak will be nonexistent as the blackout period begins for the September 20th policy meeting.  


The European Central Bank meets next week and it’s not clear at this stage what decision they will come to. Refinitiv is pricing in around a 65% chance of a hold, which may signal the end of the tightening cycle – not that the ECB would in any way suggest that at this stage – but expectations do differ. There’s every chance the committee will push through one more, at which point the data is expected to improve regardless making a Fed-style exit all the more difficult. Ultimately, it will likely come down to the projections which will be released alongside the decision. ZEW surveys aside, on Tuesday, the rest of the week is made up of tier-three data.


Potentially a big week for the UK ahead of the next monetary policy meeting on 21 September. Andrew Bailey and his colleagues this past week hinted that the decision is in the balance and not the foregone conclusion many expect. Markets are pricing in a more than 70% chance of a hike and more than 50% of another after that by February. If what they said is true, then the labor market report on Tuesday could be hugely significant as further slack could give those on the fence the reassurances they need that past measures, among other things, are working and more may not be needed. Huw Pill also speaks on Monday while Catherine Mann will make an appearance in Canada on Tuesday. GDP on Wednesday could also be interesting, with the rest of the week made up of less influential releases.


The CBR is expected to leave the key rate unchanged at 12% on Friday. It hiked very aggressively at the last meeting – from 8.5% – so there is scope for another surprise, with inflation having risen again last month to 5.1%. The rouble has also been in steady decline after rebounding following the last announcement, to trade not far from its recent lows against the dollar. 

South Africa

A relatively quiet week ahead, with manufacturing figures due on Monday and retail sales on Wednesday.


The CBRT is desperately trying to get inflation under control again with successive large interest rate hikes. In response the currency has stopped making new lows but it has drifted lower again over the last couple of weeks since the surprisingly large last hike. It’s sitting not far from the pre-meeting lows now and inflation data this past week won’t have helped, rising to 58.94% annually. More rate hikes are likely on the way. Next week the focus is on unemployment and industrial production figures on Monday.


A very quiet week to come, with PPI inflation the only economic release. We’ve been seeing some deflation in recent months in the PPI data which will be giving the SNB some comfort that price pressures are back under control. Another rate hike is no longer viewed as guaranteed, with markets slightly favoring a hold over the coming meetings but it is tight. 


The much sought-after consumer and producers’ price inflation data for August will be released this Saturday where market participants will have a better gauge of the current deflationary conditions in China.

After a slight improvement in the two sub-components of August’s NBS Manufacturing PM where new orders and production rose to their highest level since March at 50.2 and 51.9 respectively coupled with an improvement in export growth for August that shrunk to a lesser magnitude of -8.8% y/y from -14.5% y/y in July, there are some signs of optimism that the recent eight months of deflationary pressures may have started to abate.

The August CPI is expected to inch back up to 0.2% y/y from -0.3% y/y in July and the PPI is forecast to shrink at a lesser magnitude of -3% y/y in August versus -4.4% in July. If the PPI turns out as expected, it will be the second consecutive month of improvement from a persistent loop of deflationary pressure in factory gate prices since November 2022.

Other key data to focus on will be new yuan loans and M2 money supply for August which will be released on Monday. It will provide a sense of whether China’s economy is slipping into a liquidity trap despite the current targeted monetary and fiscal stimulus measures enacted by policymakers.

Lastly, the housing price index, industrial production, retail sales, and the unemployment rate for August will be released on Friday with both retail sales and industrial production expected to show slight improvement; 2.8% y/y for retail sales over 2.5% y/y recorded in July, 4% y/y for industrial production versus 3.7% in July.

Market participants will be keeping a close eye on youth unemployment for August after July’s figure was temporarily suspended by the National Bureau of Statistics without any clear timeline for the suspension. The youth joblessness data in China is of key concern after the youth unemployment rate skyrocketed to a record high of 21.3% in June, around four times more than the national unemployment rate of 5.3%.

Lastly, China’s central bank, the PBoC, will announce its decision on a key benchmark interest rate, the 1-year medium-term lending facility rate on Friday and the expectation is no change at 2.50% after a prior cut of 15 basis points. 


Inflation and balance of trade for August will be the focus for the coming week. Inflation data is released on Tuesday and is expected to dip slightly to 7% y/y from 7.44% in July, the highest since April 2022.

Balance of trade will be released on Friday and the expectation is for the deficit to widen slightly to -$21 billion from -$20.67 billion in July.  


On Monday, the Westpac consumer confidence change for September is expected to improve to 0.6% m/m from a reading of -0.4% m/m in August, following three consecutive interest rate pauses from RBA.

The key employment change data for August will be released on Thursday with 24,300 jobs expected to be created, an improvement on the 14,600 reduction in July. Meanwhile, the unemployment rate is expected to slip to 3.6% from 3.7% in July.

New Zealand

Electronic retail card spending for August is due on Tuesday and is forecast to dip to 1.4% y/y from 2.2% in July. That would represent a declining trend in growth in the past five months.

Next up, food inflation for August will be released on Wednesday; its growth rate is expected to slow to 7.8% y/y from 9.6% in July. That would be the slowest growth in food inflation since June 2022.


A couple of key data points to note for the coming week. Firstly, the Reuters Tankan Index on manufacturers’ sentiment on Wednesday; after a big jump to +12 in August – its highest level recorded so far this year – sentiment is expected to taper off slightly to +10 for September.

Producers’ price index for August will be released on Wednesday and a slight dip is expected to 3.2% y/y from 3.6% in July.

Lastly, on Thursday, we will have data on machinery orders from July with the consensus expecting a further decline of 10.7% y/y from -5.8% in June.


One key data to focus on is the balance of trade for August which will be out on Friday. The trade surplus is being expected to increase slightly to $7 billion from $6.49 billion in July. That would be the fourth consecutive month of expansion in the trade surplus.

Economic Calendar

Saturday, Sept. 9

Economic Data/Events

China CPI, PPI

G-20 summit in New Delhi: President Biden, UK PM Sunak and Saudi Crown Prince Mohammed bin Salman plan to attend

Sunday, Sept. 10

Economic Events

Russia’s Eastern Economic Forum: North Korean leader Kim Jong Un to meet with Russian President Putin

Russia holds regional elections, including in four occupied regions of Ukraine

Monday, Sept. 11

Economic Data/Events

China aggregate financing

Italy industrial production

Japan M2 money stock

Mexico industrial production

South Africa manufacturing production

Turkey current account, industrial production

The EU releases an updated economic forecast  

BOE chief economist Pill is a panelist at the Kent Invicta Chamber of Commerce event

BOE’s Mann speaks at Canadian Association for Business economics conference

US Deputy Treasury Secretary Adeyemo addresses The Economic Club of New York

Creditors of China’s Country Garden finish voting on requests to extend more bonds

Thailand PM Thavisin to unveil economic measures at joint session of parliament

Tuesday, Sept. 12

Economic Data/Events

Australia consumer confidence

Germany ZEW survey

India industrial production, CPI

Mexico international reserves

Spain CPI

UK jobless claims, unemployment

Apple unveils iPhone 15 line and next-generation smartwatches at “Wonderlust”

New Zealand’s Treasury releases pre-election economic and fiscal update

Wednesday, Sept. 13

Economic Data/Events

US August CPI M/M: 0.5%e v 0.2% prior; Y/Y: 3.6%e v 3.2% prior

Eurozone industrial production

India trade

Japan PPI

New Zealand food prices

UK industrial production

European Commission President von der Leyen delivers State of the EU speech at the European Parliament in Strasbourg.

Tech leaders including Tesla’s Elon Musk and Meta Platforms’ Mark Zuckerberg attend a forum on the future of AI convened by Senator Chuck Schumer

Thursday, Sept. 14

Economic Data/Events

US retail sales, PPI, business inventories, initial jobless claims

Australia unemployment

Eurozone ECB rate decision: Expected to deliver one last rate hike, bringing main refinancing rate to 4.50% and the deposit rate to 4.00%

India wholesale prices

Japan machinery orders, industrial production

United Auto Workers union contract talks reach a pivotal moment that could shut down a major section of the US economy

German Foreign Minister Baerbock to meet with US Secretary of State Blinken in DC

Italian PM Meloni to attend Budapest Demographic Summit

Friday, Sept. 15

Economic Data/Events

US industrial production, University of Michigan consumer sentiment, Empire manufacturing index

Canada existing home sales

China property prices, retail sales, industrial production

France CPI

Italy trade, CPI

Japan tertiary index

New Zealand PMI

Poland CPI

Russia rate decision

Chinese financial institutions set to reduce foreign exchange deposits held in reserve

Informal meeting of EU finance ministers in Spain

Sovereign Rating Updates

Germany (Fitch)

Belgium (S&P)

Saudi Arabia (S&P)

Spain (S&P)

Greece (Moody’s)

Netherlands (DBRS)


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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.