Weekly Outlook, 12-16 September

Quiet Week but CPI is in focus!

After the Central Banks' meetings in Australia, Canada, and European Union, this week we were waiting to have the British central Bank meeting as well, which is postponed to next week, September 22, the day after the FOM meeting, as a whole country prepares for Queen Elisabeth's funeral. While it is going to be a quiet week, energy price and supply concerns in Europe could be the main issue to solve for European governors. Let us review the most important events and data in the week ahead with me Ahura, and IFC markets.

British Day – Monday

Not Just Monday, we can call the whole week a British week. Even if the BoE meeting is moved to the next week, we still have many other data from the UK to watch, including GDP and Trade data on Monday, employment reports on Tuesday, and Inflation numbers on Wednesday. The political turmoil that peaked with the death of the queen and the beginning of new history with king Charles, in line with energy prices concerns heading the UK for a recession. Numbers, in general, are not expected to have a positive sign, so a downward tendency in the UK currency and stock markets can hold for a little bit longer.

US Consumer Price Index – Tuesday

The event of the week will be the US inflation number ahead of next week's FOMC meeting. We expect to see headline inflation decrease slightly due to lower gasoline prices, but Core inflation should increase by 0.3% in August. Since it is the most important data for FED, will be watched closely before its meeting, which is expected to cause a volatile market. Even though the headline is expected to ease a little bit, Core numbers are supposed to expand the idea that inflation is rooted in all sectors, which can support the hawkish stance and pressure on the stock markets.

Australia Employment – Thursday

After Last week's RBA meeting, which ended with a 50-basis point rate hike, this week's employment number will be very important. While the labor market was strong in 2022, and the unemployment rate fell from 4.2% to 3.4%, the July jobs report was significantly disappointing. Now investors will be looking to this week's report. Another unexpected decline in jobs, or even a slight gain, can change the RBA officials' minds about more hawkish policies and shift to a less aggressive 25 bps rate increase for the October meeting.

US Retail Sales – Thursday

According to the slight decrease in prices, we are expecting to see the first gain in retail sales in three months, with a 0.2% raise in August. However, as with easing prices, we expect to see a weaker labor market as well; in the longer-term retail sales are likely to feel the pullback, which would not be much positive for stock markets. However, the summer holiday and school opening will increase the sales in July and August. Better than expected data will be positive for USD index bulls.

China Retail Sales & Industrial production – Friday

After a decline in both the official and Caixin PMIs of Service and manufacturing sectors in August, Friday's retail sales and industrial production data will be critical for clues on the path of the economy in China, especially with ongoing challenges, particularly in the real estate sector. Overall estimates are a slight raise in both Retail Sales & Industrial productions. Also, we should not forget about labor market data, where it is expected to see the unemployment rate unchanged at 5.4%. With these expected data, Chines Yuan is supposed to gain a little bit against its crosses.