Weekly Outlook, 26-30 September

Speakers to explain!

We passed a very busy week with 13 meetings of central banks around the world, and now in the week ahead, policymakers will have several speeches, especially FOMC members in the United States, to explain more about their policies and reasons for their decisions. While in Europe, the energy crisis is still the main issue to solve, and many countries trying to provide a series of tax cuts and other financial supports, ECB governor Lagard will give speak twice, and both will be important. At the same time, we have many other data to watch, let's review them with me Ahura, and IFC Markets!

Central Banks' Speakers - Monday – Friday

BoJ Gov Kuroda, ECB President Lagarde, FOMC Member Mester, and German Buba President Nagel speak on Monday. And then Fed Chair Powell on Tuesday and ECB President Lagarde's speeches on Wednesday are the most interesting speeches. Last week ECB did not have a meeting, but with decisions made in other major central banks, now eyes turn to Europe to understand whether the euro will continue to trend below parity, and what officials in the European central bank thinking about that.

US Durable Goods Orders & Consumer Confidence – Tuesday

With many data and numbers that confirm that the Manufacturing sector is losing momentum, expecting a decline in August Durable goods orders is reasonable. However, the 1.4% expected decline will be largely due to a pullback in transportation orders and a relatively modest decrease in orders for Boeing aircraft. On the other hand, while Consumer confidence has fallen with high inflation and increasing economic uncertainty, still we are looking for a modest improvement in September and expect consumer confidence rose modestly to 104 from 103.2 in August. These expected data are supposed to support the US dollar bulls.

US Gross Domestic Product - Thursday

Market participants are waiting for a soft revision from -0.6% shrink to -0.5% in the second quarter of the US economy. While Consumption growth slowing, and government purchases continue to contract, overall outlooks for 2022 GDP are not so bright. However, for 2023, we can expect some recovery with more export in line with global economic recovery which is expected to start in the second quarter of next year. These data can hold pressure on US stock markets.

China PMIs – Friday

While many financial institutions and various surveys revise their forecast lower and project China's economy to grow even less than earlier estimates of 3% in 2022, PMIs will give us a clearer vision of the evolution and health of China's economy for this year and 2023. For both manufacturing and non-manufacturing PMIs, we are waiting to see a decrease compared to the previous month, but the Manufacturing section will be weaker by remaining in contraction territory. These data will put more pressure on the Chinese Yuan!

Eurozone Inflation – Friday

In line with Mrs. Lagarde's speeches during the week, we also have to follow the inflation numbers that are waiting to be published on Friday. High inflation and ECB tightening policies have brought the Eurozone economy to the brink of recession, or we can say it is already started. Despite the relative decrease in energy prices in other parts of the world, as Russia continues to restrict gas flows to the region, energy price is still high in the whole Europe, which can increase the inflation to 9.6% in September from 9.1% in August. These data will increase pressure on European Stock Markets.

US Personal Income & Spending – Friday

Overall, we expect continued yet moderate growth in US consumer spending. Forecasts show that real spending also increased by 0.1% last month. The August retail sales data suggest that slower inflation in July, before regrowing in August, increased goods spending. At the same time, with this increasing demand, prices also can grow. Therefore, Core PCE Price Index in August is supposed to increase by 0.4%, which is four times more than the previous month. These data clearly will put more pressure on the leading indices of Wall Street.