Key Events In The Coming Week

Key Events In The Coming Week

The most important event of the “coming” week was unexpected, and did not even take place during the week, but the weekend. So with Summers unexpectedly, and uncharacteristically out, here is what else is in store.

The coming weak is hosting many monetary policy meetings in the US, India, Turkey, South Africa, Norway and Switzerland. Consensus expects no change in all except the US. Specifically, as is now largely expected, the Fed will announce a shift in the mix of monetary policy instruments away from asset purchases and toward forward guidance. Regarding the forward guidance, some such as Goldman expect a clarification that the 6.5% unemployment threshold is conditional on a return of inflation to the 2% target, and even more emphasis on the importance of broad labor market improvement. There is a meaningful probability that the committee will reduce the 6.5% threshold, but this is not the base case.

Regarding the asset purchase program, most seems to expect a tapering of $10 bn, all in Treasuries, as well as confirmation from Chairman Bernanke that the committee still expects to end QE in mid-2014. Journalists at the press conference are likely to ask Chairman Bernanke if the unemployment rate is still the best measure of slack in the economy, whether the FOMC has discussed lowering the unemployment threshold, how much of the decline in labor force participation is structural and how much is cyclical, whether 7% unemployment and mid-2014 remains a reasonable forecast for the end of asset purchases, and how credible the committee’s forward guidance is at a time of leadership change. If tapering does begin, journalists are likely to press the Chairman on why the committee is tapering with inflation well below the target and a recent payrolls trend of about 150k. Minutes from six CBs including RBA and BoE are also on deck.

The week will also prove interesting with the release of external balance statistics in a number of countries and end with German elections – the latter expected to be a non-event from a financial markets perspective.

Monday, Sep 16

  • US Empire Manufacturing Survey (Sep)
  • US IP (Aug): Consensus +0.4%, previous flat.
  • Euro Area CPI (Aug): consensus unchanged at +1.3%yoy
  • Brazil IGP-10 Inflation (Sep): previous +4.12%yoy
  • India Wholesale Prices (Aug): previous +5.8%yoy
  • Argentina CPI: GS +25.4%yoy, previous +25.3%yoy
  • Also interesting: Canada Existing Home Sales

Tuesday, Sep 17

  • Australia RBA MPC minutes
  • Turkey MPC: Consensus has two key policy rates – repo and overnight lending – unchanged at 4.5% and 7.75% respectively
  • US CPI (Aug): GS +0.1%mom, consensus +0.2%mom, previous +0.2%mom
  • US TIC data (Jul): previous USD-66.9bn
  • UK Core CPI (Aug): consensus +2.1%yoy, previous +2.0%yoy
  • Euro Area Trade Balance, SA (Jul): consensus EUR+15.0bn, previous EUR+14.9bn
  • New Zealand CA Balance (2Q): consensus unchanged at -4.8% of GDP
  • Also interesting: US Homebuilders Survey, UK House Prices, Poland Employment, Singapore Non-oil Exports

Wednesday, Sep 18

  • US FOMC: on Fed Fund rate – Consensus has it unchanged at 0.25%; on pace of MBS purchases – Consensus has them unchanged at USD+40bn; on pace of Treasuries purchases – Consensus has them at USD+35bn, previous USD+45bn.
  • Sweden MPC minutes
  • UK MPC minutes
  • US Housing Starts (Aug): Consensus +2.1%, previous +5.9%
  • South Africa CPI (Aug): Consensus +6.4%yoy, previous +6.3%yoy
  • Also interesting: US MBA Mortgage Applications, Russia CPI and Retail Sales, Poland IP, Australia Leading Indicators, Mexico FX Reserves

Thursday, Sep 19

  • South Africa MPC: Consensus have rate unchanged at 5%
  • Norway MPC: GS and consensus have deposit rate unchanged at 1.5%
  • Switzerland MPC: consensus has target 3m Libor rate unchanged at 0%
  • Poland MPC minutes
  • Kuroda speaks in Tokyo
  • US Initial Jobless Claims (Sep): consensus +330K, previous +292K
  • US Philly Fed Survey (Sep): Consensus +10, last +9.3
  • US Existing Homes Sales (Aug): consensus -2.6%, previous +6.5%
  • US CA Balance (Q2): consensus USD-97.2bn, previous USD-106.1bn
  • Japan Tankan Survey (Sep)
  • Japan Trade Balance (Aug): consensus JPY-1113.8bn, previous JPY-1024.0bn
  • Switzerland Trade Balance (Aug): consensus CHF+1.80bn, previous CHF+2.38bn
  • Also interesting: Mexico Aggregate Demand, UK Retail Sales, Ireland GDP, Russia FX Reserves

Friday, Sep 20

  • Fed’s George, Bullard and Kocherlakota speak in NY; Tarullo speaks on regulation in New Haven
  • India RBI MPC
  • Mexico MPC minutes
  • Euro Area Consumer Confidence (Sep): consensus -14.5, previous – 15.6
  • Brazil IPCA-15 Inflation: Consensus +5.93%yoy, previous +6.15%yoy
  • Argentina real GDP: previous +3.0%yoy
  • Argentina CA Balance: previous USD-2380mn
  • Also interesting: Thailand FX Reserves, Canada CPI, UK CBI Industrial Trends Survey

Sun, Sep 22

  • German elections – although being a significant event
    with uncertain outcomes we recently discussed in GS Top of Mind that any
    of those outcomes should not in  our opinion contribute significantly
    to European market movements in the week pre- and post the elections


Source: GS and SocGen

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