• Mon: Chinese NBS & Composite PMIs (Sep), Caixin PMIs (Sep), Japanese Retail Sales (Aug), German Retail Sales (Jun), UK GDP (Q2), Swiss KOF (Sep), German Flash CPI (Sep), UK Mortgage Approvals/Lending (Aug), US Dallas Fed Index (Sep), New Zealand NZIER (Q3) ; Canada Holiday.
• Tue: Riksbank Minutes, EZ/UK/US Final Manufacturing PMI (Sep), EZ Flash CPI (Sep), US ISM Manufacturing PMI (Sep), US JOLTS (Aug), Mainland China and Hong Kong market holiday.
• Wed: NBP Announcement, US ADP National Employment (Sep), EZ Unemployment Rate (Sep), Mainland China market holiday.
• Thu: Swiss CPI (Sep), EZ/UK/US Final Services and Composite PMIs (Sep), US Durable Goods R (Aug), US ISM Services PMI (Sep), Mainland China and South Korea market holidays
• Fri: US Jobs Report (Sep), Mainland China market holidays

Chinese PMIS (Mon):

The NBS and Caixin PMIs will be released on the same day, with the NBS manufacturing forecast to tick higher to 49.5 (prev. 49.1) but remain in contraction territory, whilst the Caixin Manufacturing is expected to tick higher to 50.5 (prev. 50.4). The data will be keenly watched for a prognosis of the Chinese economy, with the release also coming in light of the bazooka stimulus announced by the PBoC governor on Tuesday. The stimulus announcement came after a string of concerning Chinese metrics which overall underscored weak domestic demand. Analysts at ING look “for a slight recovery of the official manufacturing PMI to 49.3 from 49.1.” Note, that Chinese markets will be closed from Tuesday for the rest of the week due to the Golden Week Holiday.

Riksbank Minutes (Tue):

As expected, the Riksbank cut its policy rate by 25bps to 3.25% (prev. 3.50%); the kicker at the meeting was that the policy rate may be cut at the two remaining meetings this year, with a possibility of a larger 50bps cut at one of those meetings; further out, the path also „indicates that one or two further cuts may be made during the first half of 2025“. This was a dovish shift to the previous verbal guidance, which pointed towards a policy rate of 2.75% by year-end. As such, EUR/SEK immediately spiked higher, but this proved fleeting; potentially because this guidance is fairly in-fitting with SEB analyst expectations. ING offers other reasons for the unreactive SEK, noting that the Riksbank’s openness to a 50bps cut could imply that the Swedish economy is on track to outperform the Eurozone; the bank adds that external factors such as the jumbo 50bps cut at the Fed is also more “accommodative” for the SEK. Taking a look at the Riksbank economic forecasts for 2025; it notably lowered CPI, marginally lowered CPIF, raised GDP and Unemployment slightly. In the post-policy announcement, Riksbank Governor Thedeen did not commit to favouring between a 25 or 50bps cut for the remaining two meetings; he noted that no single factor will decide the magnitude, but noted the main scenario will be 25bps at both meetings. Going forward, SEB has reiterated its view that the Riksbank will opt for a 50bps cut in November and a 25bps cut in December, taking the policy rate to 2.50% by year-end. Next week will see the release of the Riksbank Minutes, whereby the focus will lie on whether or not a larger 50bps reduction was discussed at the most recent gathering, and what in particular officials are looking out for to opt for a cut of a larger magnitude.

EZ Flash CPI (Tue):

Consensus (taken before French and Spanish inflation metrics) looked for headline Y/Y CPI to decline to 2.0% from 2.2%, core to pullback to 2.7% from 2.8% and super-core to hold steady at 2.8%. Note, if the headline prints at 2.0%, it will be at target for the ECB for the first time since June 2021. As a reminder, the August release saw a pullback in the headline print from 2.6% to 2.2% on account of energy inflation, whilst core inflation was dragged a touch lower by goods inflation and services inflation ticked higher to 4.2% from 4.0% due to the French Olympics. Ahead of the release, regional metrics from France and Spain came in notably lower than expected with the former slipping to 1.2% Y/Y from 1.8% and the latter printing at 1.5% vs. prev. 2.3%. As such, Capital Economics argues that the consensus is now effectively stale and headline EZ-wide inflation should “show a sharp decline to below the 2% target”. From a core perspective, the consultancy notes that core inflation is also likely to have edged down. However, in their view, this should not come as a “big surprise” to the ECB and therefore on balance, they expect an unchanged rate in October. Market pricing disagrees with Refinitiv data indicating a circa 90% chance of a 25bps reduction next month. It is worth noting that recent source reporting via Reuters suggested that (contrary to commentary in the wake of the September meeting) that the October meeting is “wide-open” given recent data points. However, we are yet to see much in the way of rhetoric from policymakers backing such a move.

US ISM Manufacturing PMI (Tue):

The consensus looks for the ISM manufacturing survey to print 47.3 in September, little changed vs the 47.2 in August. As a comparison, S&P Global’s flash data for the month showed the manufacturing output index at a two-month high (48.9 vs the prior 48.2), and the manufacturing PMI itself falling to a 15-month low (47.0 vs a prior 47.9), with the „solid“ expansion of the service sector contrasting with the decline in manufacturing output, and signalling a deterioration in business conditions within the goods-producing sector for a third successive month. „The largest negative contribution to the PMI came from new orders, which fell at the fastest rate since December 2022, followed by employment, which fell at a pace not seen since June 2020.,“ the report said, „supplier performance also detracted from the PMI, with delivery times shortening to a degree not witnessed since February, indicating spare supply chain capacity).“ S&P added that production acted as a drag on the PMI, though the decline moderated compared to August, while inventories were unchanged.

Japanese Tankan Survey (Tue):

Large Manufacturers Index for Q3 is forecast at 13 (prev. 13), while the large non-manufacturers index is seen ticking lower to 32 (prev. 33), and the large industry Capex for Q3 is seen rising to 11.9% (over. 11.1%). Desks expect the services-led recovery to carry on amid cooling inflation and strong wage growth. Industrial production meanwhile is seen as somewhat flat with Toyota production only gradually recovering. “The Bank of Japan is likely to downplay the weak IP results, but if the Tankan survey describes positive business sentiment, it should support the BoJ’s policy normalisation as early as December”, says ING.

OPEC+ JMMC (Wed):

No recommendations are expected to be put forth by the JMMC, which is not the decision-making body for OPEC+ policy. OPEC+ will likely be more focused on addressing overproduction by some nations. Recent sources suggested OPEC+ is poised to go ahead with a December oil output increase as its impact will be minimal if there is a plan for some members to make larger cuts to compensate for overproduction. Russian Deputy PM Novak also recently suggested that there were no changes to the group’s plans to return some of the phased-out production in December. Note, that the FT reported that Saudi Arabia is reportedly prepared to abandon its unofficial USD 100/bbl crude target to regain market share, although this report was met with scepticism by OPEC watchers and subsequently denied by multiple sources. „Neither Saudi Arabia nor the wider OPEC+ group have any specific target for oil prices, and no member of the producers‘ alliance is about to abandon output discipline in favour of chasing market share“, multiple OPEC+ sources have told Argus.

US ISM Services PMI (Thu):

Expectations are for the Services PMI to rise a touch to 51.7 in September from 51.5 in August. As a comparison, S&P Global’s flash PMI report for September showed US services business activity at a two-month low of 55.4 (vs 55.7 prior). S&P said that inflows of new work in the service sector rose at a rate just shy of August’s 27-month high, while new export orders for services rose at an increased rate. Backlogs of orders consequently rose slightly at service providers, hinting at a lack of spare capacity. However, the survey compiler also noted that optimism about output in the year ahead deteriorated sharply, the survey’s future output index falling to its lowest since October 2022, and the second lowest seen since the pandemic; „the deterioration in confidence was led by the service sector amid concerns over the outlook for the economy and demand, often linked to uncertainty regarding the Presidential Election,“ it said.

US Jobs Report (Fri):

The consensus looks for 145k nonfarm payrolls to be added to the US economy in September (vs 142k in August), with the unemployment rate seen unchanged at 4.2% (NOTE: the FOMC’s September projections see the jobless rate rising to 4.4% by the end of this year). Average hourly earnings are seen rising 0.3% M/M (prev. 0.4%), and average workweek hours are seen unchanged at 34.3hrs. Capital Economics says that although the job gains remain positive, they reflect a slowdown compared to recent years, adding that hiring expectations are decreasing, suggesting that payroll growth may average around 100k month for the remainder of the year. Consumer confidence in job security is also declining, with the Conference Board’s survey highlighting risks that the unemployment rate could rise to 5% later this year. CapEco says that given the cooling labour market, if payroll data continues to underperform, the Fed might consider an additional 50bps rate cut in November, following its 50bps reduction in September. As this note goes to print, money market expectations are split with regards to a 25bps or 50bps cut in November.

This article originally appeared on Newsquawk.

This article was written by Newsquawk Analysis at www.forexlive.com.

• Monday: Japan Industrial Production and Retail Sales,
  Chinese PMIs, German CPI, Fed Chair Powell. (Canada on Holiday)
• Tuesday: Japan Unemployment Rate, BoJ Summary of Opinions,
  Australia Retail Sales, Swiss Retail Sales, Swiss Manufacturing PMI,
  Eurozone Flash CPI, Canada Manufacturing PMI, US ISM Manufacturing PMI, US
  Job Openings. (China on Holiday)
• Wednesday: Japan Tankan Index, Eurozone Unemployment Rate,
  US ADP. (China on Holiday)
• Thursday: Swiss CPI, Eurozone PPI, US Jobless Claims,
  Canada Services PMI, US ISM Services PMI. (China on Holiday)
• Friday: Swiss Unemployment Rate, US NFP. (China on
  Holiday)

Tuesday

The Eurozone CPI
Y/Y is expected at 1.9% vs. 2.2% prior, while the Core CPI Y/Y is seen at 2.8%
vs. 2.8% prior. The market has already priced in a back-to-back 25 bps cut in
October following the weak PMIs, and the soft French and Spain CPI numbers last
week. The expectations are for the ECB to cut by 25 bps at each meeting until
June 2025.

The US ISM
Manufacturing PMI is expected at 47.5 vs. 47.2 prior. This and the NFP report
are going to be the most important economic releases this week. The S&P Global PMIs last week showed the Manufacturing index falling
further into contraction.

It’s unlikely that
those PMIs and maybe even the ISM PMIs incorporated the latest Fed’s decision.
The ISM data though is collected the last week of the month, so there might be
some improvement compared to the S&P Global report.

Given the focus on
global growth following the Fed and especially the PBoC decisions, the market
might be ok with a benign figure and cheer a strong rebound.

The New Orders
index should be the one to watch as it should be the first to respond to the
recent developments. The focus will also be on the Employment index ahead of
the NFP report on Friday.

The US Job
Openings is expected at 7.670M vs. 7.673M prior. The last report surprised to the downside with a big drop. Despite
that, the hiring rate improved slightly while the layoffs rate remained low.
It’s a labour market where at the moment it’s hard to find a job but also low
risk of losing one. We will see in the next months how it evolves following the
recent developments.

Thursday

The Switzerland
CPI Y/Y is expected at 1.1% vs. 1.1% prior, while the M/M figure is seen at
-0.1% vs. 0.0% prior. As a reminder, the SNB last week cut rates by just 25 bps bringing the policy rate to 1.00% and
said that it’s prepared to intervene in the FX market as necessary.

The central bank
also revised its inflation forecasts significantly lower leading the market to
price in more rate cuts beyond December 2024. Despite this, the Swiss Franc
strengthened as the market probably saw it as a weak move.

The US Jobless
Claims continues to be one of the most important releases to follow every week
as it’s a timelier indicator on the state of the labour market.

Initial Claims
remain inside the 200K-260K range created since 2022, while Continuing Claims
after rising sustainably during the summer improved considerably in the last
weeks.

This week Initial
Claims are expected at 220K vs. 218K prior, while there’s no consensus for
Continuing Claims at the time of writing although the prior release showed an
increase to 1834K.

The US ISM
Services PMI is expected at 51.6 vs. 51.5 prior. This survey hasn’t been giving
any clear signal lately as it’s just been ranging since 2022, and it’s been
pretty unreliable. The market might focus just on the employment index ahead of
the NFP report the next day.

The recent S&P Global
Services PMI noted that
“the early survey indicators for September point to an economy that continues
to grow at a solid pace, albeit with a weakened manufacturing sector and
intensifying political uncertainty acting as substantial headwinds”.

“The sustained
robust expansion of output signalled by the PMI in September is consistent with
a healthy annualized rate of GDP growth of 2.2% in the third quarter. But there
are some warning lights flashing, notably in terms of the dependence on the
service sector for growth, as manufacturing remained in decline, and the
worrying drop in business confidence”.

“A reacceleration
of inflation is meanwhile also signalled, suggesting the Fed cannot totally
shift its focus away from its inflation target as it seeks to sustain the
economic upturn.”

Friday

The US NFP report
is expected to show 140K jobs added in September vs. 142K in August and the
Unemployment Rate to remain unchanged at 4.2%. The Average Hourly Earnings Y/Y
are seen at 3.8% vs. 3.8% prior, while the M/M figure at 0.3% vs. 0.4% prior.

The Fed projected
a 4.4% unemployment rate by the end of the year with 50 bps of easing. The
unemployment rate in 2024 has been rising due to increased labour supply rather
than more layoffs, which is something that jobless claims have been capturing
well.

The market is
pricing a 53% probability of another 50 bps cut in November and that could very
well increase if the NFP report were to be weak. Of course, the opposite is
true if the labour market report were to come in better than expected with a 25
bps cut becoming the most likely move.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Federal Reserve Chair Powell discussing the US economic outlook at a National Association for Business Economics conference on Monday. This is at 1300 US Eastern time on Monday, September 30 (1700 GMT).
• On Friday, October 4, at 0830 US Eastern time (1230 GMT) we’ll get the US payroll report for September. Expectations are for a slight improvement from August for the headline and a steady jobless rate. If so the prospect of a ’soft‘, even ’no‘ landing for the US economy will increase.

Other previews of the week will be along, with Chinese data and other indicators of the US employment market. But the biggges are Powell and NFP. Strap in!

This article was written by Eamonn Sheridan at www.forexlive.com.