Forecasting the Coming Week: US CPI could have the last word before rate cuts

The Greenback succumbed to markets’ increasing expectations of a rate cut by the Fed in a couple of weeks, despite its size remaining unclear so far. Lower yields also reinforced the Dollar’s downward path, while bouts of concerns regarding the health of the US economy also added to the weekly price action.

The US Dollar Index (DXY) ended Friday’s session with decent gains, although this did not prevent it from retreating on a weekly basis amidst the strong downward bias in US yields. The Wholesale Inventories are due on September 9 along with Consumer Inflation Expectations. On September 10, the NFIB Business Optimism Index and the API’s weekly report on US crude oil inventories will be published. The Inflation Rate takes centre stage on September 11, ahead of the usual weekly Mortgage Applications tracked by MBA and the EIA’s report on US crude oil inventories. Inflation will remain at the centre of the debate with the release of Producer Prices on September 12. Export and Import Prices are due on September 13, seconded by the preliminary Michigan Consumer Sentiment.

EUR/USD could not sustain the post-NFP uptick to multi-day highs near 1.1160, coming all the way down to nearly a cent lower afterwards. The final Inflation Rate in Germany comes in on September 10, along with the European Commission’s Summer Forecasts. The ECB meeting will be the salient event on September 12, seconded by Germany’s Wholesale Prices and Current Account results. On September 13, Industrial Production in the euro area will be revealed.

GBP/USD closed its second consecutive week of losses after Friday’s strong rebound to the 1.3240 region did not hold. The release of the UK labour market report is due on September 10. Additionally, GDP figures, Balance of Trade results, Industrial and Manufacturing Production, and the NIESR Monthly GDP Tracker are all due on September 11. Finally, the RICS House Price Balance comes on September 12.

USD/JPY extended its bearish note and flirted with four-week lows in the 141.80-141.75 band. A busy docket on September 9 will feature Q2 GDP figures, Bank Lending, and Current Account data. On September 10 comes the Eco Watchers Survey and Machine Tool Orders. The weekly Foreign Bond Investment figures are due on September 12, seconded by the BSI Large Manufacturing Index and Producer Prices. On September 13, the Reuters Tankan Index, Capacity Utilization, and Industrial Production will close the weekly calendar.

Friday’s late bounce in the Greenback weighed on AUD/USD, sending it to the area of three-week lows around 0.6660. On September 9, the final Building Permits are due, followed by Private House Approvals. The Westpac Consumer Confidence Index and the NAB Business Confidence are expected on September 10, while Consumer Inflation Expectations gauged by the Melbourne Institute are due on September 11.

Anticipating Economic Perspectives: Voices on the Horizon

• The ECB’s McCaul is due to speak on September 9.
• The BoC’s Macklem speaks on September 10.
• The BoJ’s Nakagawa speaks on September 11, followed by the ECB’s McCaul and Buch, and the RBA’s Hunter.
• The ECB’s McCaul, Buch, af Jochnick and Lagarde speak on September 12, along with the BoE’s Breeden, and the BoJ’s Tamura.
• The ECB’s Lagarde speaks on September 13.

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The ECB meets on September 12.