Forex Market

Events to Look Out for Next Week

After a massive central banks week, the speed of the selloff in the stock market remains the shocker and has been very damaging as the markets reprice for the very hawkish rate outlook. US Yields have been on the rise for 11 straight sessions, an all-time record according to Bloomberg (going back to 1976). It is 33 bps cheaper on the week and is the highest since the summer of 2007. In the UK a series of tax cuts was unveiled that will likely force the BoE to hike rates aggressively and is feared to leave UK public finances unsustainable. Against the background of the energy crisis the measures are unlikely to have the growth boosting effect that PM Truss hopes. Hence next week, eyes will remain on Central bankers’ speeches.

Monday – 26 September 2022

BoJ Gov Kuroda, ECB President Lagarde, FOMC Member Mester and German Buba President Nagel speeches through the day.
IFO Business Climate, Assessment & Expectations (EUR, GMT 08:00) – The German IFO Business Climate is forecasted to decline to 87.1 in September from 88.5.

Tuesday – 27 September 2022

Fed Chair Powell Speech (USD, GMT 11:30)
Durable Goods (USD, GMT 12:30) – Durable Goods orders are expected to fall -1.3% in August with a -4.4% transportation orders drop, after a flat headline in July that included a -0.7% transportation orders drop. Durable orders ex-transportation is pegged to rise 0.3%, after a 0.3% July increase. Defense orders are expected to fall -3.1%, following a -15.9% July drop.
BoJ Minutes (JPY, GMT 23:50) – The BoJ minutes should provide further guidance after the BOJ intervened to offset the ongoing policy accommodation stance.
CB Consumer Confidence (USD, GMT 14:00) – Consumer confidence is expected to ease to 103.0 from 103.2 in August, versus a 17-month low of 95.7 in July. We expect the present situation index to slip to 143.2 from 145.4 in August. The expectations index is expected to rise to 76.2 from 75.1 in August, versus a 9-year low of 65.3 in July. Confidence got some lift in mid-Q3 from a lull in interest rates and a pop in stock prices as commodity prices fell. Yet, we’ve seen a rebound in interest rates and a stock market pull-back into September with stubborn strength in the reported inflation data.

Wednesday – 28 September 2022

ECB President Lagarde speech (EUR, GMT 07:15)
Pending Home Sales (USD, GMT 14:00) – Pending home sales are expected to plunge -4% m/m in August from -1% m/m.
FOMC Member Bullard speech (USD, GMT 14:10)

Thursday – 29 September 2022

Gross Domestic Product (CAD, GMT 12:30) – July’s GDP is expected to contract by -0.1% m/m from 0.1% m/m.
Gross Domestic Product (USD, GMT 12:30) – We expect a Q2 GDP boost to -0.5% from -0.6%, with a $3 bln hike for consumption and a $1 bln boost for inventories. We expect upward bumps of $5 bln for nonresidential construction and $1 bln for both public investment and intellectual property investment, but a downward bump of -$6 bln for net exports. The report will include the annual GDP revisions, which we assume will trim growth in late-2021 but lift growth in early-2022. The Q2 data will still depict a quarter with a huge inventory subtraction alongside a net export boost after seven consecutive quarterly subtractions. Construction fell sharply in Q2, alongside a modest drop for equipment spending but another big gain for intellectual property investment. Consumption growth slowed, and government purchases continued to contract.
RBNZ Gov Orr Speech (NZD, GMT 13:00)

Friday – 30 September 2022

Manufacturing PMI (CNY, GMT 01:30) – The September Manufacturing PMI in China is expected at 49.2 from 49.4.
Consumer Price Index (EUR, GMT 09:00) – Eurozone’s CPI for September is expected to grow by 9.6% from 9.1% y/y.
Core PCE Price Index (USD, GMT 12:30) – US personal income is anticipated to rise by 0.2% in August after a 0.2% July gain. A 0.2% rise is seen in compensation after a 0.8% gain, given a -0.1% August dip for hours-worked and a 0.3% rise for hourly earnings.

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Andria Pichidi

Market Analyst

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