Forecasting the upcoming week: The RBA is set to hike rates; NFP shifts the focus to US jobs

Another auspicious week for the US Dollar (USD) saw the buck climbing to fresh two-month highs, always underpinned by hawkish Fedspeak, while better-than-expected results in the US docket have also lent legs to the strong rebound. In the meantime, scepticism surrounding the Middle East crisis has continued to rise, while a marked pick-up in crude oil prices has started to ring inflationary bells…again.

The US Dollar Index (DXY) has reached new two-month peaks beyond the key 101.00 barrier this week, building on the previous weekly advance. The Dallas Fed Manufacturing Index is due on September 28. The FHFA’s House Price Index will be released on September 29 alongside JOLTs Job Openings, the Conference Board’s Consumer Confidence gauge and the API’s weekly report on US crude inventories. On September 30 will come the usual MBA Mortgage Applications seconded by the ADP Employment Change, PCE, Personal Income/Spending, the Chicago PMI, the final Q2 GDP Growth Rate and the EIA’s weekly report on crude oil stockpiles. The usual weekly Initial Jobless Claims are due on October 1, followed by the Challenger Job Cuts, the ISM Manufacturing, the final S&P Global Manufacturing PMI and Construction Spending. The NFP will take centre stage on October 2, along with the Unemployment Rate and Factory Orders.

EUR/USD has added to its weekly correction, down for the third week in a row while coming closer to three-month troughs around 1.1360. The final print of the EMU’s Consumer Confidence is due on September 29, followed by Consumer Inflation Expectations tracked by the European Commission. Germany will be in focus on September 30 with the release of Retail Sales, the labour market report and the preliminary Inflation Rate. On October 1 will come the final S&P Global Manufacturing PMI in Germany and the EMU, followed by the Unemployment Rate in the broader Euroland. The flash Inflation Rate in the euro bloc is due on October 2.

GBP/USD has retreated for the second straight week, this time flirting with the key 1.3200 support level for the first time since late June. The BRC Shop Price Inflation kicks in the calendar on September 29, followed by the BoE’s Mortgage Approvals/Lending, M4 Money Supply, Consumer Credit and Net Lending to Individuals. On September 30, the Q2 Current Account results, Nationwide Housing Prices, quarterly Business Investment figures and the final Q2 Growth Rate will be released. October 1 will bring the final S&P Global Manufacturing PMI, while the BoE’s Decision Maker Panel (DMP) will wrap up the docket on October 2.

Friday’s sharp appreciation of the Japanese Yen did nothing to revert the weekly recovery in USD/JPY, which has built on the previous gains and managed to approach the 159.00 hurdle. The BoJ’s Minutes are due on September 28, ahead of the release of the final Coincident and Leading Economic Indexes on September 29. Advanced Industrial Production prints are due on September 30 alongside Retail Sales, Housing Starts and Construction Orders. On October 1 will come the BoJ Summary of Opinions, the final S&P Global Manufacturing PMI, weekly Foreign Bond Investment figures, and the Tankan survey. The Unemployment Rate will be in focus on October 2 along with the Tokyo CPI and Monetary Base data.

AUD/USD has sold off sharply, challenging the key 0.7000 contention zone amid the third consecutive week of losses. Household Spending data come on September 29. The key Inflation Rate is due on September 30, seconded by flash Building Permits, Private House Approvals and Private Sector/Housing Credit figures. The final S&P Global Manufacturing PMI will be released on October 1 along with Balance of Trade results and yearly Commodity Prices. 

Anticipating economic perspectives: Voices on the horizon

• The Fed’s Barkin and the BoE’s Ramsden are due to speak on September 28, alongside the ECB’s Machado.
• The BoE’s Mann is due to speak on September 29, followed by the ECB’s Cipollone and Nagel and the Fed’s Williams, Goolsbee and Musalem.
• The ECB’s Schnabel will speak on September 30, seconded by the Fed’s Goolsbee and Barkin.
• The ECB’s Lagarde, Cipollone and Schnabel will speak on October 1, ahead of the BoE’s Bailey, Mills and Mann and the Fed’s Kashkari, Barkin, Collin, Schmid and Williams.
• The Fed’s Logan is expected to speak on October 2, along with the ECB’s Cipollone and Vujčić.

Central banks: Upcoming meetings to shape monetary policies

• The RBA will decide on rates on September 29 (hike to 4.60%).