Weekly Market Outlook (25-29 September)

UPCOMING EVENTS:

• Monday: German
  IFO.
• Tuesday: US
  Consumer Confidence.
• Wednesday: BoJ
  Meeting Minutes, Australia Monthly CPI, US Durable Goods Orders.
• Thursday:
  Australia Retail Sales, US Q2 Final GDP, US Jobless Claims.
• Friday: Japan
  Tokyo CPI, Japan Unemployment Rate, Japan Retail Sales, UK Q2 Final GDP,
  Eurozone CPI, Canada GDP, US Core PCE.

Tuesday

The US Consumer Confidence is expected to
slide further to 105.6 vs. 106.1 prior. The previous
report saw a huge miss and coupled with the
big miss in US Job Openings it hinted to some notable softening in the labour
market. In fact, compared to the University of Michigan Consumer Sentiment
survey, which shows more how the consumers see their personal finances, the
Consumer Confidence shows how the consumers see the labour
market.

Wednesday

The Australian Monthly CPI is expected to
rise to 5.2% vs. 4.9% prior. This is mainly due to higher energy prices and
it’s something that the RBA
already expects to happen in Q3. Rising energy prices and higher mortgage
payments should lower consumption and weigh on economic growth.

Thursday

The US Jobless Claims beat expectations by
a big margin once again last
week. The labour market seems to be
getting into better balance, but it still remains pretty tight. The consensus
for this week sees Initial Claims at 217K vs. 201K prior and Continuing Claims
at 1675K vs. 1662K prior.

Friday

The Eurozone CPI Y/Y is expected at 4.5%
vs. 5.2% prior, while the Core CPI Y/Y is seen at 4.8% vs. 5.3% prior. Unless
we see blowout numbers, this report is unlikely to change anything for the ECB,
which is clearly leaning towards keeping rates higher for longer now.

The
US PCE Y/Y is expected to rise to 3.5% vs. 3.3% prior, while the M/M reading is
seen at 0.5% vs. 0.2% prior. The Core PCE Y/Y, which is the Fed’s preferred
measure of inflation, is expected at 3.9% vs. 4.2% prior, while the M/M figure
is seen at 0.2% vs. 0.2% prior.