The week ahead: 16 - 20 September 2024
These are the Key Macro Events for the upcoming week.
United States – Wednesday evening, we expect the FOMC to ease rates by 25 bps, with some upside risk to 50 bps, see for details on our view. Markets will be looking for an update on the Fed's view on the labor market, as well as updates to the projections and the new dot plot. We expect the distribution to shift more dovish, back to a median of three cuts this year.
Before the meeting, on Tuesday, we get Retail sales, which may have decreased marginally following last months' sharp increase of 1.0%. Cars were a big contributor to the July figure, and data for August suggests they will put downward pressure now. Control group retail sales, which excludes car sales will likely stay relatively strong at 0.3%. Industrial production is likely to rebound from last month's strong decline, coming in at +0.2%.
Eurozone – A number of ECB Governing Council members are scheduled to speak now that the blackout period is over, and markets will be watching closely for clues on the future path for rates. Consumer confidence (Friday) is expected to continue gradually recovering, helped by continued solid wage growth.
The Netherlands – The unemployment rate is expected to edge up to 3.7% in August (3.6% in July) as the labour market remains tight but the peak is behind us. The normalisation in the number of bankruptcies will provide some relief, allowing labour dynamics to pick up a bit. Given strong labour demand and limited available labour supply the unemployment rate is expected to remain low in the coming years.
Asia – China’s August activity data (industrial production, retail sales, fixed investment) published on Saturday 14 September are generally expected to show a further slowdown in annual growth. On the monetary policy front, we foresee further mini policy rate cuts and RRR cuts going forward, but consensus expectation including ours is for the 1-year MLF rate (between 18 and 25 September) and the 1-year loan prime rate (Friday 20 September) to be kept on hold for now. Meanwhile in Japan, we concur with the consensus view that the BoJ will keep its target rate at 0.25% on Friday. Going forward, we expect further gradual rate hikes by the BoJ in 2024-25, with a 25bp hike scheduled for Q4-2024 – although the BoJ showed in July that it can sometimes move earlier than markets expect.
UK – The Bank of England is expected to keep rates on hold after its first rate cut in August, and to keep its QT target at GBP100bn. Inflation, due ahead of the meeting, is likely to edge slightly higher, as lower energy prices are offset by firm core inflationary pressure.