The first full week of September brings some important data releases, interest rate decisions for Canada and Australia, plus a G20 meeting.
UK data including services PMI and retail sales figures, in the US there’s factory orders and the trade balance, while Chinese trade will also be in focus.
Between the ASEAN summit in Asia this weekend and the G20 meeting in Delhi on the next weekend, central bank policy decisions in Australia and Canada could see a further shift in market sentiment.
“Markets will be especially attuned to the BoC decision and [the US] Fed's Beige Book release on Wednesday, preceded by the RBA meeting on Tuesday,” said Deutsche Bank.
Investors will be looking for signals and ahead of decisions from the European Central Bank on 14 September and the US Federal Reserve and the Bank of England on 20 and 21 September respectively.
The pace of interest rate rises is slackening around the world this year, though not some monetary authorities such as the Bank of England, while some emerging market central banks such as those of Brasil and Chile have started to cut rates.
There have been 135 rate hikes around the globe in 2023, well below half the rate of last year’s 367 increases, according to cbrates.com with 42 interest rate cuts compared to 17 last year.
“Emerging market central banks moved to tighten first, so it is reasonable to expect them to be first to loosen too, but both the Reserve Bank of Australia (RBA) and the Bank of Canada did nothing at their last meeting, so they will be under the microscope this time,” said analysts at AJ Bell.
For the RBA, it will be Governor Philip Lowe’s last meeting in charge, with his deputy, Michele Bullock, taking over after criticism of policy in recent year, especially in view of how rapid rate rises have taken a toll on the Aussie housing market.
With the RBA having left rates unchanged for two meetings in a row, at 4.10%, economists think this will continue.
In Ottowa, the Bank of Canada paused on rates in March and April but hiked by a quarter-point in both June and July to reach 5%.
Market consensus is that another hike to 5.25% will see the BoC reach its peak.
Major economic announcements this week
Tuesday: BRC Sales Monitor (UK), PMI Services (UK), Composite PMI (UK), New Car Sales (UK), Services PMI (EU), Factory Orders (US), Caixin Services PMI (China)
Wednesday: PMI Construction (UK), Construction PMI (EU), Retail Sales (EU), MBA Mortgage Applications (US), Balance of Trade (US), PMI Composite (US), PMI Services (US), Crude Oil Inventories (US),
Thursday: Halifax House Price Index (UK), Continuing Claims (US), Initial Jobless Claims (US)
Friday: Wholesales Inventories (US)