In-depth Analysis

Weekly Outlook 12-16 September

 

Focus on American and European CPI
 

  • On Monday 12th: The U.K releases its Industrial and Manufacturing reports and Trade Balances.
  • On Tuesday 13th: The Average Earnings Index report, Claimant Count Change, the 3M Employment Change, and the Unemployment Rate are all due from the UK. Germany and the Eurozone publish ZEW Economic Sentiment survey reports and the U.S releases CPI data for August.
  • On Wednesday 14th: The CPI data from the U.K and PPI reports from the U.S are published.
  • On Thursday 15th: The U.S publishes its Crude Oil Inventories, the Philadelphia Federal Reserve Manufacturing Index, and Retail Sales reports. New Zealand’s GDP and Australia’s Employment info are released.
  • On Friday 16th: China’s Industrial Production reports are due. The U.K’s Retail Sales data is released and CPI data is published from the Eurozone.

Weekly outlook

A big week ahead, primarily for the U.K with a number of key economic releases that will keep investors busy. The Bank of England has however postponed its Monetary Policy Committee meeting for one week to the 22nd of September, as the nation mourns the loss of Queen Elizabeth II on the 8th of September. With King Charles being officially proclaimed the new Monarch and Liz Truss being newly appointed as Prime Minister, it’s all happening in Great Britain at the moment.

Highly anticipated CPI data is also due from the U.S and the Eurozone, and it will be very interesting to see what effect tightening monetary policy conditions has had on the current world-wide crisis with inflation.

Monday 12th of September

The UK releases a number of key reports today, both the Industrial and Manufacturing reports for the month of July, and both the Trade Balances between the UK & EU and between the UK & everywhere other than the EU for July.

Industrial production for the UK, which is a measure of the output of the industrial sector, is predicted to have increased to 0.4% from -0.9% over the month, while the Manufacturing production is also set to have increased output from 0.4% to -1.6%.

The UK/EU trade balance is forecast to increase slightly from -22.85 billion to -22.30 billion and signifies that imports are far higher than exports to the EU, while last month’s non-EU countries balance was -12.29 billion, numbers which new Prime Minister Liz Truss has pledged to improve greatly during her term.

Tuesday 13th of September

Again from the U.K, the Average Earnings Index report, the Claimant Count Change, the 3-month Employment Change, and the Unemployment Rate figures are all published on Tuesday. 

Average Earnings are said to be increasing to 5.2% from 5.1%, and the Claimant Count numbers – which indicate the change in the number of unemployed people claiming insurance benefits over the month – is expected to increase to -9.2 from -10.5. The Employment Change is expected to show 256K more workers employed compared to the same three-month period last year, after the previous three months were well below expectations at 160K. Unemployment is expected to stay steady at 3.8%.

The German and Eurozone ZEW Economic Sentiment reports are published today for an insight into what the six month outlook from September feels like to 350 German investors and analysts. 

A reading above zero is said to be positive for growth, and below is said to be negative. For the German’s report, expectations are for a decrease from the already very low -55.3 further down to -60.0. The Eurozone’s figures have also been on a downward trend with -54.9 last month and -51.1 in July.

The U.S reports on its key CPI data today for August, with the expectation from analysts that the figures are improving slightly after sharp interest rate increases by the Fed, with 8.1% year-on-year from 8.5%, and -0.1% from 0.0% from the previous month.

Wednesday 14th September

The U.K releases its key CPI data today for the month of August, and is expected to show a small increase to the rate of inflation from 10.1% to 10.2% annually, and holding steady for the month at 0.6%, results that may further push the Bank of England into a stronger rate increase during its next meeting.

The U.S publishes its PPI, or “Producer Price Indexes” for a look at the change in prices to predominantly raw materials and semi-finished materials. Increases are usually passed on to the consumer and decreases usually mean higher margins for the producer, these figures are watched closely by the Fed as it looks to maintain price stability. 

Core PPI excluding food and energy for the month of August is predicted to be up to 0.3% from the previous month’s 0.2%. PPI for all sectors is forecast to have increased from -0.5% to -0.1%.

Thursday 15th of September

A busy day for the U.S on Thursday with several reports being released, including the Crude Oil Inventories, with last week’s stocks at 8.844M, and the Philadelphia Federal Reserve Manufacturing Index – which looks at the survey results from 250 manufacturers in the local Philadelphia area – to determine how business conditions are faring. The forecast of a drop from 6.2 to 3.5 indicates worsening conditions, but anything above 0 is said to be positive for the industry.

Key Retail Sales reports are also due for an insight into the American public’s current spending habits. Core sales that exclude vehicles are said to be down to 0.2% from 0.4% for the month of August, while full retail sales are expected to be up from 0.0% to 0.2%.

New Zealand is due to publish its GDP figures for the second quarter, with expectations of an increase to 0.8% from -0.2%.

Australia releases its Employment reports with the Employment change which is forecast to show 50K new jobs, up from a drop of 40.9K, and the Unemployment Rate is expected to be unchanged at 3.4%.

Friday 16th of September

Chinese Industrial Production reports are released today for a look at the value of output from the manufacturing industry, quarries, and utilities. For August this figure is expected to have increased to 4.0% compared to 3.8% compared to the same time last year.

The U.K publishes its key Retail Sales data which is expected to reflect the currently difficult economic conditions and show a reduction from -3.4% to -4.2% for the month of August compared to last year, and from 0.3% to -0.6% from July.

Highly anticipated CPI data is released from the Eurozone today. If tightening monetary policy from the ECB is having the desired impact on inflation, then forecasts from analysts for the figures to remain unchanged at 9.1% will hopefully be proven correct, and the tide is therefore starting to turn.

 

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