Forecasting the upcoming week: Focus shifts to US inflation and the ECB

The US Dollar (USD) accelerated its decline at the end of the week, weighed down by disheartening prints for US Nonfarm Payrolls in August (+22K jobs). The data did nothing but add further conviction to a most likely interest rate cut by the Federal Reserve at its September 17-18 meeting.

The US Dollar Index (DXY) set aside gains recorded in the previous week and ended this one with modest losses, always amid the ongoing consolidative theme in the lower end of its recent range. The New York Fed will publish its Consumer Inflation Expectations on September 8. On September 9, the NFIB Business Optimism Index is due, seconded by the Nonfarm Payrolls Annual Revision andthe API’s weekly report on US crude oil inventories. The usual weekly MBA Mortgage Applications are due on September 10, prior to Producer Prices, Wholesale Inventories, and the EIA’s weekly report on US crude oil stockpiles. The Infaltion Rate takes centre stage on September 11, ahead of the usual weekly Initial Jobless Claims. The preliminary U-Mich Consumer Sentiment will wrap up the calendar on September 12.

Friday’s solid performance saw EUR/USD climb to five-week highs around 1.1750, always supported by the increasing selling pressure on the Greenback. Germany’s Balance of Trade results and Industrial Production prints will kickstart the domestic docket on September 8 alongside the Sentix Index. The final Inflation Rate in Germany will be released on September 12.

GBP/USD regained strong upside impulse on Friday, managing to close the week with decent gains after two consecutive pullbacks. The BRC Retail Sales Monitor is due on September 9. On September 12 comes the RICS House Price Balance, GDP figures, Goods Trade Balance, Industrial and Manufacturing Production, Construction Output, and the NIESR Monthly GDP Tracker.

USD/JPY plummeted to the 147.00 region on Friday, leaving the week practically unchanged from its previous one. Japan’s Current Account results are due on September 8, seconded by the final Q2 GDP Growth Rate, Bank Lending figures and the Eco Watchers Survey. Machine Tool Orders will come on September 9, while the Reuters Tankan Index, BSI Large Manufacturing index, Producer Prices, and the weekly Foreign Bond Investment data are all due on September 11. The final Industrial Production and Capacity Utilisation will be released on September 12.

AUD/USD advanced to multi-week tops and came within shouting distance of the 0.6600 hurdle. The final Building Permits and Private House Approvals are expected on September 8. The Westpac Consumer Confidence will be published on September 9 along with the NAB Business Confidence gauge. The Melbourne Institute’s Consumer Inflation Expectations are due on September 11.

Anticipating economic perspectives: Voices on the horizon

• The ECB’s Montagner is due to speak on September 9.
• The ECB’s Buch will speak on September 10.
• The RBA’s Jones will speak on September 12.

Central banks: Upcoming meetings to shape monetary policies

• The ECB will meet on September 11 (2.00% act. vs. 2.00% exp.), as well as the CBRT (43.0% act. vs. 41.00% exp.).