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Euro area HICP to report a notable step down

25 September 2023

Emily Nicol
  • In the euro area, the flash September inflation estimates will report a notable step down as base effects from last year’s German discounted travel pass falls out of the annual calculation
  • In the UK, BoE bank lending figures will flag ongoing weakness in mortgage lending amid higher borrowing costs and declining house prices
  • In the US, August figures for personal spending are set to be boosted by strong income growth, albeit with growth being flattered by higher prices
  • In Japan, this week will bring the BoJ’s estimates of underlying inflation in August and Tokyo CPI figures for September

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Fed, BoE and BoJ in action this week

18 September 2023

Emily Nicol
, 
Chris Scicluna
  • While the BoE is likely to hike rates by a further 25bps and accelerate the pace of QT, it might signal a stronger likelihood that it has reached peak rates; and the Fed is widely expected to take a pause in its rate hiking cycle, while the BoJ will maintain its negative policy rate and YCC parameters.
  •  Data-wise, August inflation reports are due from the euro area, UK, as well as Japan. 
  • In terms of economic activity, the flash September PMIs from the major economies will be watched closely for an update on economic momentum at the end of Q3.

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ECB to hike interest rates

11 September 2023

Emily Nicol
, 
Chris Scicluna
  • We expect the ECB to hike rates by a further 25bps and insist that rates are likely to remain restrictive for as long as necessary to get inflation back to target.
  • The yen appreciated and JGB yields rose across the curve following Saturday’s Yomiuri interview with BoJ Governor Ueda, where he flagged the possibility of ending the negative interest rate policy, and perhaps even by year end.
  • In the UK, all eyes will be on the labour market report, while in the US, the main focus will be August’s CPI report. 

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Policy rates approaching the peak for the cycle

04 September 2023

Emily Nicol
, 
Chris Scicluna
  • With policy rates approaching the peak for the cycle, central bank announcements and commentary should be watched this week. 
  • Data-wise, in Japan, wage growth is expected to remain above 2%.
  • In the euro area, producer prices, final services PMIs and the ECB’s consumer expectations surveys will provide further insights on the inflation outlook.
  • UK surveys are expected to point to a further deterioration in economic momentum.

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Jackson Hole the main focus this week

21 August 2023

Chris Scicluna
  • Jackson Hole is the main focus this week. With rates likely close to (or already at) their peak for this cycle, Fed Chair Powell, and ECB President Lagarde, have the opportunity on Friday to give their thoughts about both the short- and medium-term monetary policy outlook. 
  • Data-wise, the flash August PMIs from Europe and Japan will be of most interest for timely signals on both economic activity and price developments in the middle of Q3. 

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