Economics week ahead

Next week is light on the domestic data front, with focus on Thursday's new home sales report. We expect sales to partially recover in August, rising 2.6% to a 623K pace after a sharp decline in July. Higher mortgage rates continue to weigh on affordability and demand, though builder incentives remained in place and conditions did not worsen materially during the month.

Abroad, consensus expects Australia’s August employment report to show a rebound in hiring after July’s decline, which would reinforce our call for the RBA to raise the Cash Rate by 25 bps in September. In Mexico, we expect Banxico to leave the policy rate unchanged at 6.50% for a third straight meeting this year. Our focus will be on the accompanying statement and whether policymakers signal a shift in tone following the Fed’s recent rate hike.

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