Week Ahead – Trump Closing the Gap

Far From Uneventful

The upcoming week is a little light on the data front but don’t expect it to be uneventful. Donald Trump is closing the gap on Joe Biden two months before the election and the race is hotting up. Meanwhile, the tech sell-off has gripped the markets, putting sharp focus on the sector next week. If that doesn’t do it for you, the ECB meets on Thursday, as speculation mounts about more stimulus this year.

Key Economic Events

Saturday, Sept. 5

-Italian think tank the European House continues its forum in Cernobbio. French Finance Minister Bruno Le Maire, EU Brexit negotiator Michel Barnier, and German Deputy Finance Minister Joerg Kukies are expected to speak

Economic Data:

  • Colombia CPI
  • Australia AiG performance of services index

Sunday, September 6th

-The European House continues its forum in Cernobbio, northern Italy.

Monday, September 7th

-US and Canada celebrate Labor Day. Markets are closed.

– Another face-to-face Brexit discussion between the U.K. and EU occurs in London. The odds are growing for a no-deal split at the end of the Brexit transition period.

Economic Data:

    • Japan official reserve assets
    • Australia ANZ job advertisements, foreign reserves
    • Germany industrial production
    • Singapore foreign reserves
    • Hong Kong foreign reserves
    • South Africa gross and net reserves, consumer confidence
    • China trade, foreign reserves
    • Philippines foreign reserves

Tuesday, September 8th

Economic Data:

      • Australia ANZ Roy Morgan consumer confidence, NAB business conditions
      • Japan labor cash earnings, GDP, BoP, bank lending, Eco Watchers survey outlook, household spending
      • Euro-area GDP, employment
      • South Africa GDP

Wednesday, September 9th

-US China Economic and Security Review Commission holds an online public hearing to evaluate key developments in China’s economy, military capabilities, and U.S. relations during 2020.

-The Bank of Canada is expected to keep its overnight rate target unchanged at 0.25%. Governor Tiff Macklem will hold a press conference.

Economic Data:

        • Mexico CPI
        • Canada housing starts
        • Canada rate decision
        • New Zealand ANZ Truckometer heavy traffic index, ANZ business confidence and activity outlook, manufacturing activity
        • South Korea unemployment
        • Japan money stock, bankruptcies, machine tool orders
        • Australia Westpac consumer confidence, home loans, investor loan value
        • South Africa business confidence
        • Hungary CPI
        • France industrial confidence
        • China PPI, CPI

Thursday, September 10th

-The ECB will keep monetary policy unchanged, but they could signal more stimulus could be warranted later in the year.  Close attention will fall on the new forecasts for growth and inflation, which will provide insight on how optimistic the ECB is with the economic recovery. 

Economic Data:

    • U.S. initial jobless claims, PPI, wholesale inventories
    • EIA Crude Oil Inventory Report
    • New Zealand card spending, REINZ house sales
    • Japan core machine orders
    • Australia consumer inflation expectations
    • France industrial production
    • Italy industrial production
    • Turkey unemployment
    • Czech CPI
    • Sweden, Norway, Denmark inflation
    • South Africa current-account balance, mining production, manufacturing production
    • China money supply, new loans, FDI

Friday, September 11th

-US consumer prices are expected to push higher for a third consecutive month.  The so-called core CPI is expected to come back down to earth after last month’s 0.6% which was the largest gain since 1991. 

-European Union finance ministers gather for a two-day meeting.

-The ECB’s Jens Weidmann speaks on a panel at a Bundesbank conference in Frankfurt.

Economic Data:

    • U.S. CPI, Baker Hughes rig count, Treasury budget statement
    • Mexico industrial production
    • New Zealand performance of manufacturing index, food prices
    • Japan PPI, BSI business conditions
    • U.K. GDP
    • Spain industrial output
    • BOE inflation expectations survey
    • Turkey current-account balance
    • India industrial production

Sovereign Rating Updates:

Austria (S&P), Norway (S&P), Portugal (S&P), Poland (Moody’s)



The US economic outlook continues to improve after another solid labor report and steady flow of positive vaccine developments.  The focus in the US however remains on the stock market selloff and if investors are starting to position for a choppy period going forward.  Positioning for a post-pandemic and presidential election could be starting to price in a rough road for big tech.  

The upcoming round of economic data should see US consumer prices rise for a third consecutive month, but be nowhere near to creating worry at the Fed.   

US Politics

President Trump still has a lot of ground to make up over the next two months.  Now that the conventions are over, Biden still seems to have a favorable lead, but it is shrinking.  In mid-August, Biden had a comfortable 12-percentage point lead against President Trump in the USA Today/Suffolk University Poll, but that has fallen down to 7-percentage points.  The first Presidential debate is not until September 29th, so the focus will fall on the several upcoming campaigning events.  


It’s been a week of stimulus as far as the EU is concerned. The “France Relaunch” stimulus from Emmanuel Macron – totalling €100 billion, around 4% of GDP – aims to deliver a full economic recovery ahead of the 2022 election. Meanwhile, Germany has backed plans for more extraordinary deficit spending next year, having already extended its employment subsidies to the end of 2021. All of this at a time when the EU has agreed a historic recovery fund alongside its seven year budget. There’s no shortage of stimulus in Europe.

The ECB meeting should provide further clarity on the prospects for further easing before the end of the year. The economic recovery has slowed, Covid cases have been rising and annual inflation went negative last month. We may not get further stimulus next week but traders will be hanging on Lagarde’s every word, not to mention the new economic projections.


Still no progress on the more contentious issues, most notably level playing field and fishing rights, but more talks scheduled to take place next week. None of this will come as great surprise with October being touted as the deadline. We’ve seen it all before. This is going to the wire, expect more frustration after the next round of talks.


The focus for UK officials this week will be Brexit talks as the country tries to avoid adding no deal to the list of problems for business. The PMIs this week were encouraging, as is the BoE’s position that it stands prepared to load more stimulus and has plenty of firepower to do so. Low tier data next week is unlikely to make a considerable difference. 


All quiet on the trade front with the US. Heavy data week with Balance of Trade the highlight on Tuesday. Continued recovery in export component expected. If US equity sell-off persists, it will weigh on China equities this week. 

Hong Kong

Security law worries have been ignored by stock markets which are concentrating on upcoming IPOs such as Ant Financial, proving that money talks. 

No significant data.


Covid-19 continues to wreak havoc on the domestic economy, heightening fears about growth as the stability of the banking system. India will shortly become the no 2 infected country with no end in sight. A protracted US equity sell-off could exacerbate concerns and threaten fragile recovery by the INR and India stock markets.

India Industrial Production for July expected to contract by another 15%, heighlighting Covid’s impact on the economy. WPI released on the 14th September could raise the very real fears that India is facing stagflation.

New Zealand 

The New Zealand covid-19 outbreak appears to be coming under control, lifting the currency and equities. An extended Auckland lockdown will weigh on data in the coming weeks though. The RBNZ is considering negative rates and further signs of deterioration will raise expectations for further easing.  Vulnerable to poor China data on Monday.


Trade relations with China continue to worsen with Barley imports banned as yet another “probe” is launched. Fallout transitory as long as coal, copper and iron ore are left alone. Strong negative if those are targeted.

Data is second tier this week with a recovery in job ads expected to continue, boosting sentiment. 

As a pro-cyclical market, a sustained equity sell-off and/or poor China data on Monday could negatively impact Australian markets.


Heavy data week with Japan Q2 GDP, Machinery Orders and Tankan Index. All are expected to show Japan remains in recession as export facing industry struggles with demand. USD/JPY mid-range awaiting next move, Japan equities firm despite US weakness.

Abe’s successor will be announced on September 14th. Little market impact in the meantime as it is expected that the pillars of Abenomics will remain mostly intact.



Oil staged a bit of a recovery after tumbling in the middle of the week only to tumble again after the jobs report. Once again, we’re facing a market that was struggling to maintain upside momentum and a few headlines provided the catalyst for some profit taking. The consolidation could have continued for longer but once a couple of technical levels fell, it’s just accelerated from there. WTI has since found some support just above $40 but $39 is arguably more significant support. It may now find some resistance around $42.


Gold is coming under pressure again after the dollar jumped in the aftermath of the jobs report, piling further misery on the yellow metal. The US PMI report on Tuesday ruined its attempt to break $2,000 again, with the dollar also rising on the back of that report. Gold now finds itself back around the lower end of its $1,900-2,000 range and support is looking vulnerable. 

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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.