Forecasting the upcoming week: Trump, Xi, oil, tariffs and PMIs

A very positive week saw the US Dollar (USD) climb to new seven-week tops, mostly backed by the hawkish tilt at the FOMC event on Wednesday while unabated strength in Crude Oil prices have also underpinned the move during the first half of the week.

The US Dollar Index (DXY) has advanced to fresh two-month tops well past the key 100.00 hurdle this week, leaving behind two weekly declines in a row at the same time. The Chicago Fed National Activity Index kicks in the docket on September 21. The ADP Employment Change Weekly comes on September 22 alongside the API’s weekly report on US crude inventories. On September 23 will come the usual MBA Mortgage Applications seconded by the preliminary S&P Global Manufacturing and Services PMIs and the EIA’s weekly report on crude oil stockpiles. The usual weekly Initial Jobless Claims are due on September 24, followed by Current Account results, New Home Sales and the Trump-Xi Summit. Wrapping up the docket, Producer Prices, Existing Home Sales and the EIA’s weekly report on US crude oil stockpiles are all due on September 10. Wrapping up the docket will come Durable Goods Orders and the final U-Mich gauge.

EUR/USD traded with a marked bearish bias this week, building on the previous pullback and hitting new seven-week troughs near 1.1450. The advanced Consumer Confidence in the Euroland is due on September 22, while the preliminary S&P Global Manufacturing and Services PMIs in Germany and the EMU will take centre stage on September 23. In Germany, the IFO Business Climate is due on September 24 and the GfK’s Consumer Confidence will be released on September 25.

GBP/USD tumbled to as low as the 1.3330 region, or multi-week lows, rapidly leaving behind the previous week’s modest advance. Public Sector Net Borrowing figures are due on September 22 followed by the CBI Industrial Trend Orders. The flash S&P Global Manufacturing and Services PMIs are expected on September 23 and the CBI Distributive Trades will come on September 24. The Gfk Consumer Confidence print will close the calendar on September 25.

The BoJ failed to deliver a (largely anticipated?) hawkish message and could not prevent the Yen to extend its depreciation this week, sending USD/JPY to the boundaries of the 158.00 hurdle, or two-week highs. An extremely light docket will only see the release of the advanced S&P Global Manufacturing and Services PMIs.

AUD/USD traded on the defensive for the second week in a row, briefly retesting the 0.7070 zone for the first time since mid-August. The preliminary S&P Global Manufacturing and Services PMIs are due on September 23, while the labour market report takes centre stage on September 24.

Anticipating economic perspectives: Voices on the horizon

• The Fed’s Goolsbee is due to speak on September 21, along with the RBA’s Hunter and the BoC’s Macklem.
• The ECB’s Buch speaks on September 22, followed by the Fed’s Jefferson, Williams and Barkin.
• The ECB’s Vujčić will speak on September 23 ahead of the Fed’s Barr and the ECB’s Lane.
• On September 24, the ECB’s Schnabel will speak, joined by the Fed’s Williams and the BoE’s Dhingra and Bean.
• The Fed’s Williams and Hammack are due to speak on September 25, along with the ECB’s Vujčić.

Central banks: Upcoming meetings to shape monetary policies

• The PBoC will decide on rates on September 21 (unch).
• The MNB meets on September 22 (unch)
• The BI will meet on September 23 (hike to 6.00%), alongside the RBSA (unch)
• The Riksbank (unch), the Norges Bank (unch), the SNB (unch) and Banxico (unch) will all meet on September 24.