The week ahead is striking in the sheer number of central bank speakers, but with the Fed on hold until December and the BoJ’s new framework now revealed, focus turns squarely from central banks to US politics. The first US presidential debate at the start of the week will be a key focus.
Elsewhere, the OPEC meeting in Algiers will also draw attention, though headlines on Friday suggesting a supply deal remained elusive dampened expectations. Looking at the longer-term picture, our commodity colleagues see hints that the oil price war is over.
- Kicking things off this morning will be Germany where the September IFO survey is due to be released, while the UK will follow with the latest CBI reported sales data for this month. In the US the only data scheduled to be released are August new home sales and the September Dallas Fed manufacturing survey.
- We start in Asia on Tuesday where Japan PPI and China industrial profits data are both scheduled to be released. The only data worth highlighting in Europe on Tuesday is the M3 money supply growth figure for the Euro area. In the US tomorrow we’ll firstly get the S&P/Case-Shiller house price index for July, followed by the remaining flash PMI’s (services and composite), consumer confidence in September and the Richmond Fed manufacturing survey for this month.
- Turning to Wednesday, during the Asia period we’ll get small business confidence in Japan and also the latest consumer sentiment reading in China. During the European session we’ll then get consumer confidence readings out of Germany, France and Italy. There’s important data in the US on Wednesday with the flash August durable and capital goods orders numbers.
- We’ve got a reasonably busy calendar on Thursday to get through. In Japan we’ll get the August retail trade and sales data. During the European session we’ll get September CPI and unemployment data out of Germany, along with Euro area confidence indicators in September and also UK money and credit aggregates numbers for August. During the US session all eyes will be on the third revision to Q2 GDP (expected to be nudged up two-tenths to +1.3% qoq), while the August advance goods trade balance, wholesale inventories, initial jobless claims and pending homing sales for August are also due.
- We close the week in Japan with a bumper set of releases include the jobless rate, household spending, industrial production, housing starts and the August CPI print. China will also release the Caixin manufacturing PMI print. During the European session we’ll get CPI and PPI in France, the final Q2 GDP print for the UK and also CPI for the Euro area in September. In the US we end the week with the personal income and spending report for August, PCE core and deflator readings, Chicago PMI and finally the last revision to the University of Michigan consumer sentiment reading.
The complete breakdown of events is as follows:
If that wasn’t enough, DB’s Jim Reid points out that there’s plenty away from the data too.
- ECB President Draghi is due to speak at EU parliament in Brussels today at 3pm BST while the Fed’s Tarullo and Kaplan are also due to speak. The first US Presidential election debate also takes place tonight while the OPEC meeting in Algeria is also obviously worth keeping an eye on given the informal sideline meeting of producers. The forum will run through to Wednesday. It’s also expected that Italy PM Renzi will set the date for the planned referendum on constitutional reform at some stage today.
- Tomorrow the Fed Vice-Chair Fischer is due to speak.
- On Wednesday there’s more Fedspeak with Bullard and Evans are also due to speak along with Fed Chair who is testifying before the House Financial Services Committee on the topic of bank supervision, although this is a platform not commonly associated with the Fed Chair expressing opinions on either the economic outlook or monetary policy.
- On Thursday we hear from the Fed’s George and also the BoJ’s Kuroda during the Asia session – although we’re not sure if Kuroda will be speaking on monetary policy at all. The Fed’s Harker, Lockhart, Powell and Kashkari are also due to speak, as is Yellen again before a minority banking conference. With little in the way of key data since the FOMC it’s unlikely that this will be hugely market moving. The European Banking Summit also kicks off in Brussels on Thursday.
- Finally on Friday during the Asia session we get the BoJ summary of opinions from last week’s meeting.
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Looking at just the US, the key economic releases this week are new home sales on Monday, durable goods orders on Wednesday, and the PCE report on Friday. Hhere is the summary of key events alongside consensus expectations:
Goldman breaks down the key events expected in the US in the next week:
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Monday, September 26
- 09:30 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Federal Reserve Bank of Minneapolis President Neel Kashkari will deliver opening remarks at the Fourth Symposium on “Ending Too Big to Fail” in Minneapolis, Minnesota. Recently, President Kashkari said that he worries about hiking interest rates too quickly more than too slowly.
- 11:45 AM Fed Governor Tarullo (FOMC voter) speaks: Federal Reserve Governor Daniel Tarullo (FOMC voter) will give a speech titled, “Next Steps in the Evolution of Stress Testing” to the Yale School of Management Leaders Forum.
- 10:00 AM New home sales, August (GS -8.0%, consensus -8.3%, last +12.4%): We expect new home sales to decline by 8.0% in August, following a strong 12.4% gain in July. New home sales are highly volatile on a month-to-month basis. Both single-family and multi-family housing starts weakened in August, and a decline in multi-family buildings permits offset modest increases in single-family units.
- 10:30 AM Dallas Fed manufacturing index, September (consensus -3.0, last -6.2)
- 01:30 PM Dallas Fed President Kaplan (FOMC non-voter) speaks: Federal Reserve Bank of Dallas President Robert Kaplan (FOMC non-voter) will take part in a moderated Q&A at the Independent Bankers Association of Texas Annual Convention in San Antonio, Texas. Media Q&A is expected. Last week, President Kaplan remarked that the Fed “can afford to be patient in raising rates.”
Tuesday, September 27
- 09:00 AM S&P/Case-Shiller home price index, July (GS -0.1%, consensus flat, last -0.1%): The Case-Shiller home price index appears to have been influenced by seasonal adjustment challenges recently. We expect a 0.1% decline in house prices in the July report based on the pattern seen last year. Over the past year, the 20-city index has increased by 5.1%.
- 09:45 AM Markit Flash US Services PMI, September preliminary (consensus 51.2, last 51.0)
- 10:00 AM Conference Board consumer confidence, September (GS 99.0, consensus 98.8, last 101.1): We expect consumer confidence to edge down in September after the index rose to 101.1 from a revised 96.7 in August. The University of Michigan’s preliminary estimate of consumer sentiment for September was unchanged, slightly below consensus expectations for a modest increase.
- 10:00 AM Richmond Fed manufacturing index, September (consensus -2, last -11)11:15 AM Fed Vice Chairman Fischer (FOMC voter) speaks: Federal Reserve Vice Chair Stanley Fischer will discuss reasons to study economics at Howard University.
Wednesday, September 28
- 08:30 AM Durable goods orders, August (GS +0.2%, consensus -1.4%, last +4.4%): Durable goods orders ex-transportation, August (GS -0.7%, consensus -0.5%, last +1.3%); Core capital goods orders, August (GS -1.6%, consensus -0.1%, last +1.5%); Core capital goods shipments, August (GS flat, consensus +0.1%, last -0.5%): We expect durable goods orders to rise 0.2% and core capital goods orders to decline -1.6% in August, following a stronger-than-expected report in July. August industrial production data came in a bit below consensus expectations, and regional manufacturing surveys were mostly weaker. We also expect core capital goods shipments to be flat. Over the last year, core capital goods orders declined by 4.9%, while core capital goods shipments declined by 7.1%.
- 08:45 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Federal Reserve Bank of Minneapolis President Neel Kashkari will participate in a moderated Q&A at the Institutional Investor Conference in Minneapolis, Minnesota.
- 10:00 AM Fed Chair Yellen (FOMC voter) speaks: Federal Reserve Chair Janet Yellen will testify before the House Financial Services Committee on supervision and regulation. At the September FOMC post-meeting press conference, Chair Yellen remarked that most of the FOMC participants judged that while the case for a rate hike had grown stronger, “the economy has a little more room to run than might have been previously thought.”
- 10:10 AM St. Louis Fed President Bullard (FOMC voter) speaks: Federal Reserve Bank of St. Louis President James Bullard will make introductory remarks on community banking at a research conference sponsored by the Federal Reserve and the Conference of State Bank Supervisors titled, “Community Banking in the 21st Century.”
- 01:30 PM Chicago Fed President Evans (FOMC non-voter) speaks: Federal Reserve Bank of Chicago President Charles Evans will deliver the afternoon keynote address on community banking at a conference on “Community Banking in the 21st Century” in St. Louis. President Evans recently remarked that U.S. monetary policy appears to be less expansionary now and the Fed could “normalize policy much faster than currently envisioned and still keep the pace gradual.”
- 04:35 PM Cleveland Fed President Mester (FOMC voter) speaks: Federal Reserve Bank of Cleveland President Loretta Mester will give a speech on the economic outlook and policy at the Greater Cleveland Partnership Third Quarter Middle-Market Forum. At the September FOMC meeting, President Mester was one of the three dissenters who preferred to increase the federal funds rate target range.
- 07:15 PM Kansas City Fed President George (FOMC voter) speaks: Federal Reserve Bank of Kansas City President Esther George will give a speech at a conference titled, “Banking and the Economy: A Forum for Minority Bankers.” At the September FOMC meeting, President George was one of the three dissenters who preferred to raise the federal funds rate target.
Thursday, September 29
- 05:00 AM Philadelphia Fed President Harker (FOMC non-voter) speaks: Federal Reserve Bank of Philadelphia President Patrick Harker will give a speech on the economic outlook at the Global Interdependence Center’s Central Banking Series in Dublin, Ireland.
- 08:30 AM Advanced goods trade balance, August (GS -$61.1bn, consensus -$62.3bn, last -$58.8bn): U.S. Census Bureau Report on Advance Economic Indicators; Last month, the Census Bureau’s Advance Economic Indicators report showed a smaller-than-anticipated trade deficit, offset by soft wholesale and retail inventory accumulation. We expect the goods trade deficit to widen moderately in August.
- 08:30 AM Initial jobless claims, week ended September 24 (GS 260k, consensus 260k, last 252k); Continuing jobless claims, week ended September 17 (last 2,113k): We expect initial jobless claims to move up to 260k after claims declined to 252k last week. The decline in claims primarily reflected a sharp drop in California.
- 08:30 AM GDP (third), Q2 (consensus +1.3%, last +1.1%); Personal consumption, Q2 (consensus +1.8%, last +1.8%): Consensus expects Q2 GDP to be revised up to 1.3% from 1.1% in the third revision. Personal consumption is expected to remain unchanged.
- 08:30 AM Wholesale inventories, August (consensus flat, last +0.1%): Consensus expects wholesale inventories to be flat in August.
- 08:50 AM Atlanta Fed President Lockhart (FOMC non-voter) speaks: Federal Reserve Bank of Atlanta President Dennis Lockhart will give a keynote presentation at the Future of Florida Forum in Orlando, Florida. Audience and media Q&A is expected.
- 10:00 AM Pending home sales, August (consensus flat, last +1.3%): Consensus expects pending home sales to be flat in August. Last month, pending home sales rose 1.3% while prior months were revised downward. We have found pending home sales—based on contract signings rather than closings—to be a decent leading indicator of existing home sales with a one- to two-month lag.
- 10:00 AM Fed Governor Powell (FOMC voter) speaks: Federal Reserve Governor Jerome Powell will present on “Trends in Community Bank Performance over the Past 20 Years” at a conference on community banking in St. Louis.
- 02:00 PM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Federal Reserve Bank of Minneapolis President Neel Kashkari will speak at a town hall in Rapid City, South Dakota. No media Q&A is expected.
- 04:00 PM Fed Chair Yellen (FOMC voter) speaks: Federal Reserve Chair Janet Yellen will address a conference on Banking and the Economy: A Forum for Minority Bankers” hosted by the Kansas City Fed via video link.
Friday, September 30
- 8:30 AM Personal income, August (GS +0.3%, consensus +0.2%, last +0.4%): Personal spending, August (GS +0.1%, consensus +0.2%, last +0.3%); PCE price index, August (GS +0.14%, consensus +0.20%, last flat); Core PCE price index, August (GS +0.17%, consensus +0.20, last +0.10%); PCE price index (yoy), August (GS +0.9%, consensus +0.9%, last +0.8%); Core PCE price index (yoy), August (GS +1.6%, consensus +1.7%, last +1.6%): We expect personal income to rise by 0.3% and personal spending to rise by 0.1% in the August report. We also expect core PCE prices to increase by 0.17% after core CPI rose by 0.25%, above consensus expectations. The core PCE price index likely rose by 1.6% over the past year.
- 09:45 AM Chicago PMI, September (GS 52.0, consensus 52.3, last 51.5): We expect the Chicago PMI to edge up to 52.0 from 51.5, still above the breakeven level.
- 10:00 AM University of Michigan consumer sentiment (final), September (GS 90.0, consensus 90.0, last 89.8): The Michigan consumer sentiment gauge remained unchanged at 89.8 in the September preliminary estimate, and we expect the index to edge up to 90.0 in the final estimate. Overall, consumer sentiment has been range-bound since early 2015.
Source: BofA, DB, GS
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