Week ahead

With traders more than happy to price in Fed cuts for 2024 where possible, they will be looking for further signs that the US economy is slowing but at a rate that does not scream recession. And this places US ISM services and the nonfarm payroll report into the limelight next week. China’s trade data and inflation figures may reveal whether Beijing need to step up support for the economy yet again. And whilst the RBA and BOC are expected to hold the cash rate steady at their monetary policy meetings, their statements may indicate how much of an appetite there is for further hikes in Q1.

Thanksgiving in the US has made for a very quiet second half to the week for traders, but with a key US inflation report and an OPEC meeting on tap then volatility is expected to return next week. Also note that Australia releases inflation figures which could be the deciding factor as to whether the RBA hold or hike at their final meeting of the year.

In what seems like a while, the US economic calendar is relatively quiet with no top tier events. But US bond auctions should be on trader’s radars as they provide a look at how strong demand is (or not) for the ultimate US safe-haven asset. And if demand is low, it could send yields higher and shake a few equity bulls out of the tree and generally weigh on risk sentiment. We also have the RBA minutes and a potentially ‘live’ speech for the governor to keep tabs on.

Hawkish comments from Jerome Powell with the threat of further hikes snapped Wall Street’s 8-day wining streak, and hints at a swing high on the S&P 500 heading into the weekend. And that puts traders on high alert for next week’s inflation report, not to mention the threat of a government shutdown if the debt ceiling is not raised by Friday.

Bond yields continue to retrace for a second week with the US dollar, which has allowed risk assets to bounce from their lows. Whilst it has been a nice reprieve from negative sentiment, it remains debatable as to whether the supposed short-covering rally can switch to a risk-on phase. Tuesday’s RBA meeting is more than likely to be live, and that could help AUD/USD move higher from oversold levels.

We have a busy calendar with what would usually be ‘red flag’ days, including central bank meetings with the FOMC, BOJ and BOE. There’s a reasonable chance we’ll see no action across all three, but the bigger response for global markets could be if the BOJ widen or abandon their yield curve control (YCC).

Find out what to expect from this week's earnings calendar.

Event risk picks up a gear with big tech earnings, inflation readings from the US and Australia, rate decisions from the Eurozone and Canada and the latest PMI reports joining the mix, creating an environment that should provide ample opportunities for traders.

The combination of a key US inflation report and finely-balanced ECB interest decision should keep EUR/USD on trader’s radars. Although we also have plenty of data out from China which could sway sentiment for risk assets, including CPI/PPI, loan growth, investment, retail sales and employment.

We can expect quieter trade on Monday due to the Labor Day weekend in the US and Canada, but as the week progresses we have a host of data from the APAC region including China's PMIs, inflation and trade figures. Governor Lowe holds is last RBA meeting and, like the RBA, the BOC are expected to hold rates. The ISM services PMI survey is a key data point for the US.

It's the last trading week of August, and it's fair to say that market conditions were more volatile and eventful than this time of year tends to provide. At the time of writing, we're yet to hear what Fed Chair Jerome Powell has to say, but it could certainly set the tone for next week's trade. And there is no shortage of data to kick off September, including US PCE inflation, GDP, and the ISM manufacturing survey. Final PMIs are also published for the US, UK, Europe, Japan, and Australia. And incoming RBA Governor Bullock speaks, and a host of Australian data includes CPI, retail sales, home loans, and capex.

The annual Jackson Hole symposium has arrived, and once again Jerome Powell will be the highlight of the event. Last year his speech marked the beginning of a 20% decline for the S&P 500 (which was already in a bear market), so his words clearly packed a punch. We also have retail sales data for the UK, Canada and the US and earnings from a few US companies can also help us measure consumer sentiment.

It may be the middle of the US summer, but economic data keeps coming thick and fast. A defiantly strong set of economic data from the UK piles the pressure on the Bank of England (BOE) to keep tightening, and makes next week's Consumer Price Index (CPI) report as relevant as ever.

US inflation takes the centre stage next week for economic data, with the Bank of Canada (BOC) and Reserve Bank of New Zealand (RBNZ) also set to announce their monetary policy decisions.

The RBA meet on Tuesday in what could be Governor Lowe’s final meeting, so will he go out with a 25bp bang of fade away with a pause? Employment data for the US includes Nonfarm payrolls, ADP and claims data, and traders also have ISM manufacturing and services reports to look forward to.

Find out what to expect from the stocks due to report earnings this week.

We’re heading into the weekend with some risk-off volatility across Asian markets, as traders respond to the 50bp BOE and (well-grounded) concerns that central banks globally are not yet done with their tightening cycles. That means economic data remains as important as ever as investor as we head into next week, which includes PCE inflation for the US, flash PMIs across Europe and official PMI data for China.