The global economy is facing several challenges, including high inflation and rising interest rates. Central banks around the world are playing a key role in trying to manage these challenges, and their decisions in the coming weeks and months will have a major impact on the global economy.
USD
- The US Federal Reserve will convene its monetary policy meeting on Wednesday, September 20th.
- Market forecasts expect interest rates to remain unchanged at the current level of 5.25%-5.5%.
- Investors are eagerly awaiting the release of the latest FOMC projections, which will provide insights into the potential impact of the Fed's aggressive policy tightening on inflation and the labor market.
- Shifting to economic data, the preliminary estimate of the S&P Global PMI survey is expected to show further deterioration in the US manufacturing sector in September.
EUR
- The euro fell below 1.068, its lowest level in six months, after the European Central Bank raised interest rates by 25 basis points for the 10th consecutive meeting. The ECB raised rates on lending facilities, deposit facilities, and refinancing operations in an effort to combat stubborn inflation. However, the ECB also signaled that this may be the last rate hike for the time being.
- Germany and France are expected to see a further decline in both manufacturing and services sector activity in September.
- Producer prices in Germany are expected to rise for the second time in 11 months.
GBP
- The Bank of England is expected to raise interest rates by 25 basis points to 5.5%, the highest level since 2008, at its next meeting on September 20th. This would be the Bank's 15th consecutive rate hike.
- ? The UK economy lost over 200,000 jobs in the three months to July, pushing the unemployment rate to 4.3%. However, average earnings continued to rise sharply.
- ? Inflation figures for August showed that consumer prices surged by 7.1%, significantly above the Bank of England's 2% target. However, flash PMI figures for September are expected to show a second consecutive monthly decline in private sector output.
Economic Calendar - The Week Ahead
Monday
- Germany: Bundesbank Monthly Report
Tuesday
- Australia: Reserve Bank of Australia Meeting Minutes
- Canada: Consumer Price Index
- Canada: Bank of Canada Governor Tiff Macklem Speech
- Eurozone: Harmonized Index of Consumer Prices
Wednesday
- United Kingdom: Consumer Price Index
- United Kingdom: Producer Price Index
- United Kingdom: Retail Price Index
- United Kingdom: House Price Index
- Germany: Producer Price Index
- United States: Federal Reserve Interest Rate Decision
- United States: Federal Reserve Monetary Policy Statement
- United States: Federal Reserve Interest Rate Projections
- United States: Federal Open Market Committee Press Conference
- China: People's Bank of China Interest Rate Decision
Thursday
- United Kingdom: Bank of England Interest Rate Decision
- United Kingdom: Monetary Policy Summary
- United States: Initial Jobless Claims
- Eurozone: Consumer Confidence
Friday
- United Kingdom: Retail Sales
- United Kingdom: GfK Consumer Confidence
- United States: S&P Global Manufacturing and Services PMI
- Eurozone: IHS Markit Manufacturing and Services PMI
- Canada: Retail Sales
- New Zealand: Trade Balance
- Japan: Consumer Price Index
- Japan: Bank of Japan Press Conference
- Japan: Bank of Japan Interest Rate Decision
- Japan: Bank of Japan Monetary Policy Statement
That's all for this week. We'll be back next week with more news and analysis on the global economy. In the meantime, please let us know if you have any questions in the comments.
The weekly market update is published every Monday.
This is for informational purposes only and should not be interpreted as specific investment advice.
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