The Economic Week Ahead

Main Macro Events This Week

United States:  The calendar highlighted by September nonfarm payrolls, (Friday) which are expected to increase by 170k, with a 160k private payroll gain. Forecast risk is seen as downward, however, as weaker claims and producer sentiment could weigh on the headline. The unemployment rate is expected to hold steady from 4.9% since June. The workweek is expected to tick up to 34.4 from 34.3 last month. Hourly earnings are expected to be up 0.2% which would leave a 2.6% y/y rise. Hours-worked should be 0.2% for the month following a 0.1. Also on tap are several other releases worthy of consideration, including ISM manufacturing (Monday), which may bubble back over the 50 boom-bust line in September, having stumbled hard to 49.4 in August. Construction spending may rise 0.4% in August from unchanged in July. September vehicle sales are expected to grow 0.5% to a 17.0 mln pace, up from August, but down from the 17.8 mln 2016 peaks in January and July. The schedule resumes with MBA mortgage applications (Wednesday) and the ADP employment survey forecast to post a 160k print for September vs 177k. The August trade balance may widen to -$43.4 bln  vs -$39.5 bln and the ISM non-manufacturing index is set to rise to 53.5 in September vs 51.4. Factory goods orders dip 0.3% in August vs a 1.9% July gain. Initial jobless claims are forecast to rebound 6k to 260k (Thursday) for the October 1 week. Along with employment, wholesale trade and consumer credit (Friday) will round out the week.

Fedspeak resumes with Lacker (hawk) on the economic outlook (Tuesday), followed by Evans (dove) on current economic events and policy. Kashkari (moderate) introduces a child development program (Thursday) followed by Lacker  (again) meeting with students  followed by a speech on Fed governance. Fed VC Fischer (Friday) speaks on the economy and regulation, while Mester (hawk) discusses “Fed Communications” . Fed Governor Brainard (dove) takes part in an IIF panel on “Blockchain Technology”.

Canada: The calendar picks-up this week, with several heavy hitters due out that will provide further indications of how the economy fared after oil sands production returned to normal in July. The August trade report (Wednesday), with the deficit expected to narrow to -C$2.3 bln from the -C$2.5 bln shortfall in July. A 1.0% increase in exports is anticipated following the 3.4% surge in July. Employment (Friday) is projected to reveal a 10.0k gain in September jobs following the 26.2k bounce in August. The unemployment rate is seen steady at 7.0% in September. The BoC’s Business Outlook Survey (Friday) is projected to reveal an improvement in the overall outlook, but with a still ample reserve of caution among resource sector firms and related businesses. Q2. Building permit values (Thursday) are seen rising 0.5% m/m in August after the 0.8% gain in July. The Ivey PMI (Friday) rounds out the week, with the index expected to improve to 55.0 in September on a seasonally adjusted basis from 52.3 in August.

Europe: Data releases include the final reading of September PMIs with the Eurozone Manufacturing PMI expected to be confirmed at 52.6. and the Services reading at 52.1, which should leave the composite at 52.6, unchanged from the preliminary number. The highlight though will be German manufacturing orders for August (Thursday) where we are looking for a rise of 0.5%, after the modest 0.2% m/m expansion in July. July Ifo numbers surprised on the upside and the manufacturing PMI also rebounded, so that the chances are orders picked up again in August. Industrial production (Friday) should show at least a partial rebound from the -1.5% m/m slump in July and rise 0.8% m/m (med 0.9%). The recovery is limping ahead and so far the labor market has remained on an improving trend and against that background consumption should remain underpinned, but even if Eurozone retail sales (Wednesday) are likely to have dropped -0.3% m/m, as a partial correction from the 1.1% m/m gain in July. ECBspeak comes from Draghi, Coeure and Nowotny among others, with Coeure and Draghi attending the IMF/World Bank meeting in Washington at the end of the week.

UK: The calendar is highlighted by the PMI reports for September, along with production data for August, which will increase the body of post-Brexit vote hard data. The manufacturing PMI (Monday) is expected to dip to 52.1 after surging to 53.3 in August. The construction PMI is seen nearly steady at 49.0, which would be a fractional decline from August’s 49.2. The services PMI is expected to ebb to 52.0 from 52.9. While the PMIs are thus seen lower, the overall picture would be of a better than most feared performance of the UK economy following the vote to leave the EU.

China: On holiday all week, but has September services PMI (Friday), along with September foreign direct investment, which is seen slowing to a 4.0% y/y versus the 5.7% reading in August.

Japan: September consumer confidence (Tuesday) likely fell to 41.0 from 42.0. September services PMI is due Wednesday, and 1st 20-day September trade data on tap Friday.

Australia: Te Reserve Bank of Australia’s meeting (Tuesday), expected to reveal no change in the current 1.50% rate setting. Assistant Governor (Economic) Kent participates in a panel in Melbourne (Wednesday). Building approvals (Tuesday) are expected to fall 0.5% m/m in August after the 11.3% gain in July. Retail sales (Wednesday) are seen rising 0.4% m/m in August following the flat reading in July. The trade deficit is projected to widen to -A$2.5 bln in August from -A$2.4 bln in July.


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