US: Key events for next week -  Danske

Analysts from Danske Bank take a look into next week economic releases in the US.

Key Quotes:

“In the US next week, we have several important data releases, which could be important for the Fed’s decision whether to hike soon or not.”

“On Tuesday we start with the preliminary  Markit service PMI index for September, where it will be key to see if the weak signals from the service sector continue.The index has been right about the weak GDP growth rates in the past three quarters, so another weak print will be a strong sign that GDP growth in Q3 may have disappointed as well, as the service sector is supposed to be the main growth driver.”

“On Friday, the PCE inflation figures for August are due. We estimate the PCE core index rose 0.2% m/m in August implying a core inflation rate increase to 1.7% y/y from 1.6% y/y in July, although it is a close call between 1.6% y/y and 1.7% y/y. We estimate the headline index increased 0.1% m/m in August implying the PCE headline inflation rose to 0.9 % y/y in August. That core inflation continues to run below 2% is one of the main reasons why the Fed was on hold at the last meeting.”

“Next week will be heavy in terms of Fed communication as twelve different FOMC members are scheduled to speak at this moment including Fed Chair Yellen (although it is not a given she will talk about monetary policy). As the committee was very divided at this week’s meeting, where FOMC kept the target range unchanged at 0.25-0.50, we will listen carefully to what the different members are saying to get a better understanding of Fed’s thinking.”

“Note that the first presidential debate is taking place on Monday 26 September, meaning that we are going to talk a lot more about US politics in the coming weeks.”