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BNZ – BusinessNZ Performance of Services Index (PSI) for August 2024 is 45.4

• prior 45.2
• remains in contraction, now for 6 months in a row – longest period since the global financial crisis
• average over the history of the survey is 53.2

BNZ’s Senior Economist Doug Steel:

• smoothing through monthly volatility, the PSI’s 3-month average remains deep in contractionary territory at 43.9

This article was written by Eamonn Sheridan at www.forexlive.com.

Global markets are set to enter this key week on a strong note after Wall Street rallied again on Friday, as investors increased expectations that the Federal Reserve will cut rates by 50 basis points this week.

There is no doubt that the FOMC meeting will be the highlight of the week for many traders. However, there is much more on the event schedule that could move markets, including key rate updates from the Bank of England and the Bank of Japan, as well as a plethora of important Tier 1 data releases.

Here’s our day-by-day breakdown of the major risk events this week:

It is very much the calm before the storm on Monday, with little on the calendar for the first trading day of the week. Traders are expecting thinner liquidity in the Asian session, with both China and Japan on bank holidays. Aside from the Empire State Manufacturing Index, due out in the New York session, there is little scheduled to disturb the markets.

The macroeconomic calendar kicks into action on Tuesday and doesn’t leave much room for respite until the Friday New York close. China is on holiday again in another quiet Asian session, and we have just the German ZEW Economic Sentiment data due once London opens. However, Tier 1 data releases start in the New York session with key Canadian CPI numbers due alongside U.S. Retail Sales data.

Once again, a quiet Asian session with little on the calendar, but early focus in Europe will be on the UK, with the release of CPI numbers just 24 hours ahead of the BOE rate decision. U.S. data in the early New York session features the latest Building Permits numbers as well as the weekly Crude Oil inventory data. The main event comes at the end of the session when we finally hear the Fed’s much-anticipated rate decision.

Thursday has the potential to be one of the most volatile sessions of the week, and arguably of the quarter, coming on the back of the key Fed decision. The Antipodes will be in sharp focus in the Asian session, with New Zealand’s quarterly GDP data and key Australian employment numbers scheduled. The Bank of England will update the market on its latest rate decision midway through the London session. When New York opens, we have the weekly unemployment claims, the Philly Fed Manufacturing Index, and Existing Home Sales data all due for release.

Friday’s calendar does not let up for traders, with key rate decisions in the Asian session from both the Bank of Japan and the People’s Bank of China. The London session will see more focus on the UK, with the latest Retail Sales data due before New York opens. Initial focus will be on Canada, with Bank of Canada Governor Tiff Macklem set to speak shortly before the release of Canadian Retail Sales data. Closer to the close, we will hear updates from ECB President Christine Lagarde and the FOMC’s Patrick Harker.

The post The Week Ahead – Week Commencing 16 September 2024 first appeared on IC Markets | Official Blog.

We had terrible data out of China over the weekend:

• China August: Retail sales +2.1% y/y (expected +2.5) Industrial production +4.5% y/y (4.8)

There won’t be a response from Chinese stocks as markets are closed there today and tomorrow:

• Chinese and Japanese markets are closed today, Monday, September 16, 2024, for holidays

As for today’s calendar … m’eh:

• This snapshot from the ForexLive economic data calendar, access it here.
• The times in the left-most column are GMT.
• The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.

This article was written by Eamonn Sheridan at www.forexlive.com.

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:

This article was written by Eamonn Sheridan at www.forexlive.com.

Both the S&P index in the NASDAQ index have been higher on each of the trading days this week. That comes after the NASDAQ index fell by -5.77% last week, and the S&P index fell by -4.25% as well.

This week with a 1-day to go:

• S&P index is up 3.46%
• NASDAQ index is up 5.27%

The Dow industrial average is up 1.86% this week after falling -2.93% last week.

The futures this morning are implying a mixed opening

• Dow industrial average up 94 points
• S&P index up 10.01 points
• NASDAQ index is trading down -18 points

This article was written by Greg Michalowski at www.forexlive.com.

The FBI, Secret Service, and local law enforcement will hold a press conference regarding the attempted assassination of former President Trump.

Awaiting details.

So far:

• Gunshots fired “in the vicinity” of Trump – Trump is unharmed
• More on the Trump shooting (Trump is unharmed) – Secret Service returned fire
• Trump shooting (he’s unharmed) – Checking indicative FX rates – 16 September 2024

• Trump on the Sunday shooting, says he is safe and well, will never surrender

Trump was injured in the first attempt. This time the great news is he is completely unharmed.

ADDING, this via CNN:

• The US Secret Service confronted the man with the AK-47 when they were clearing a specific part of the course ahead of former President Trump’s arrival at that part of the course.

• The Secret Service fired their weapons, the suspect dropped his weapon, and fled.

This article was written by Eamonn Sheridan at www.forexlive.com.

Shots were fired near Trump at his gold course in Florida on Sunday afternoon.

Reports are still sketchy. So far:

• Gunshots fired “in the vicinity” of Trump – Trump is unharmed
• More on the Trump shooting (Trump is unharmed) – Secret Service returned fire
• Trump shooting (he’s unharmed) – Checking indicative FX rates – 16 September 2024

Trump statement:

Again, Trump is completely unharmed.

I have heard though that he might need to ‘read the room’ a bit better.

This article was written by Eamonn Sheridan at www.forexlive.com.

Reports surrounding the shooting are still sketchy and we await further information. Was does seem to be clear is that Trump is unhurt, safe and well. Thankfully.

Indicative rates, little change from late Friday:

• EUR/USD 1.1081
• USD/JPY 140.75
• GBP/USD 1.3127
• USD/CHF 0.8474
• USD/CAD 1.3596
• AUD/USD 0.6709
• NZD/USD 0.6158

Usual warning … on a Monday morning, market liquidity is very thin until it improves as more Asian centres come online … prices are liable to swing around, so take care out there.

Again, Trump unhurt

This article was written by Eamonn Sheridan at www.forexlive.com.

Earlier news:

• Gunshots fired “in the vicinity” of Trump – Trump is unharmed

The key headline news is that Trump is unhurt, thankfully.

There are conflicting reports re the shooting:

• CNN reports that the gunfire at Trump’s golf club were intended to hit Trump
• NY Post reports the shots were fired in relation to an ‘outside dispute’, not to do with Trump, nor aimed at him
• Reports also that Trump’s protective Sectret Service detail returned fire.
• Reports also that an AK 47 was found on the ground, abandoned .

• Reports a suspect has been detained.

We are awaiting more detail.

But, again, Trump was not hit and is well.

This article was written by Eamonn Sheridan at www.forexlive.com.

Gunshots were fired “in the vicinity” of former President Donald Trump on Sunday. The shooting took place at Trump’s golf course in West Palm Beach, Florida, Trump International Golf Course, “where former President Trump was golfing”.

Trump is unharmed.

The last time Trump suffered an injury to his ear. This time nothing, thankfully.

This article was written by Eamonn Sheridan at www.forexlive.com.

UPCOMING
EVENTS:

• Monday: New Zealand Services PMI.
• Tuesday: Eurozone ZEW, Canada CPI, US Retail Sales, US
  Industrial Production and Capacity Utilization, US NAHB Housing Market
  Index.
• Wednesday: UK CPI, US Housing Starts and Building Permits,
  BoC Summary of Deliberations, FOMC Policy Decision.
• Thursday: New Zealand Q2 GDP, Australia Labour Market
  report, BoE Policy Decision, US Jobless Claims.
• Friday: Japan CPI, PBoC LPR, BoJ Policy Decision, UK
  Retail Sales, Canada Retail Sales.

Tuesday

The Canadian CPI
Y/Y is expected at 2.1% vs. 2.5% prior, while the M/M measure is seen at 0.0%
vs. 0.4% prior. As always, focus will be on the underlying inflation measures.
The Trimmed Mean CPI Y/Y is expected at 2.5% vs. 2.7% prior and the Median CPI
Y/Y is seen at 2.3% vs. 2.4% prior.

The BoC is
expected to cut rates by 25 bps at both the last two meetings left for this
year, but there’s also a chance that the central bank delivers bigger rate cuts
if growth and inflation were weaker than projected as Governor Macklem mentioned last week.

The US Retail
Sales M/M is expected at 0.2% vs. 1.0% prior, while the Ex-Autos M/M measure is
seen at 0.3% vs. 0.4% prior. The focus will be on the Control Group figure
which is expected at 0.2% vs. 0.3% prior.

Consumer spending
has been stable which is something you would expect given the positive real
wage growth and resilient labour market. We’ve also been seeing a steady pickup
in the UMich Consumer
Sentiment which suggests
that consumers’ financial situation is stable/improving.

Wednesday

The UK CPI Y/Y is
expected at 2.2% vs. 2.2% prior, while the M/M measure is seen at 0.3% vs.
-0.2% prior. The Core CPI Y/Y is expected at 3.5% vs. 3.3% prior, while the M/M
figure is seen at 0.4% vs. 0.1% prior.

The market expects
the BoE to keep rates unchanged at the upcoming meeting and then cut rates by
25 bps in November and December.

The consensus
among economists sees the Fed cutting rates by 25 bps. The market pricing
though is evenly split between a 25 and 50 bps cut. Some people say that
starting with a standard 25 bps would be better because the economy is still
fine, and 50 bps might be seen as panicky.

Central banking is
also about risk management though. The market pricing is giving the Fed a nice
opportunity to deliver a 50 bps “insurance cut” without surprising. Things
would have been much different if we had something like 30% probabilities for a
50 bps cut and 70% for a 25 bps one.

The Fed didn’t
have the chance to see the labour market report last July as the data was
released two days later. Maybe, if they had the data a week earlier, we might
have seen them cutting by 25 bps back then already and then continuing with 25
bps cuts for the subsequent meetings.

Fed Chair Powell
made it clear at the Jackson Hole Symposium that they will not tolerate more
labour market weakening and they will do everything they can to keep it strong.
Considering everything, starting with a 50 bps cut makes much more sense.

The Fed can then
show that it was just an insurance cut via its Summary of Economic Projections
and Powell can double down on that at the Press Conference. Speaking of the
SEP, the market is expecting the Fed to deliver at least 100 bps of easing by
year-end. The Fed can cut by 50 bps and then project two more 25 bps cuts by
year-end.

Further out, the
market expects the Fed to deliver 150 bps of easing in 2025 which seems too
aggressive at the moment. To sum up, I personally expect the Fed to cut rates
by 50 bps, but in the end what’s important is that the Fed is finally starting
to ease its policy and the magnitude will be shaped by the data in the next
months.

Thursday

The Australian
Labour Market report is expected to show 30.0K jobs added in August vs. 58.2K
in July and the Unemployment Rate to remain unchanged at 4.2%. The market
expects the RBA to deliver the first rate cut in February 2025, but the
probabilities can be brought forward to December 2024 if the data
were to disappoint in the next months.

The BoE is
expected to keep rates unchanged at 5.00%. The expectations for such a move
have been shaped by relatively strong data with PMIs firmly in expansion,
inflation moderating at a slow pace and the unemployment rate ticking lower.
The market then expects the central bank to cut by 25 bps in November and
December.

The US Jobless
Claims continues to be one of the most important releases to follow every week
as it’s a timelier indicator on the state of the labour market.

Initial Claims
remain inside the 200K-260K range created since 2022, while Continuing Claims
have been on a sustained rise (although they’ve improved recently) showing that
layoffs are not accelerating and remain at low levels while hiring is more
subdued.

This week Initial
Claims are expected at 230K vs. 230K prior, while there’s no consensus for Continuing
Claims at the time of writing although the prior release showed an increase to
1850K.

Friday

The Japanese Core
CPI Y/Y is expected at 2.8% vs. 2.7% prior. Inflation has been picking up
alongside wage growth which are two of the most important factors for the BoJ. Nonetheless,
the BoJ is expected to keep rates unchanged this time around and potentially
deliver another rate hike by the end of the year.

The BoJ is
expected to keep interest rates unchanged at 0.25%. The focus will be on the
Press Conference as the markets will be attentive to signals or hints on the
timing of the next rate hike.

Several BoJ
officials kept the rate hikes on the table as they want to normalise policy to
a more neutral stance. Markets instability has been a major concern for the central
bank, so they will likely wait for the Fed to be a bit more down the road in
its easing cycle before tightening policy further.

The PBoC is
expected to keep the 1 year and 5 year LPR rates unchanged at 3.35% and 3.85%
respectively. The Chinese economic data hasn’t been exactly good and
deflationary risks remain high. Chinese officials should really go harder on
monetary policy easing and bring real rates down from the current high levels.

This article was written by Giuseppe Dellamotta at www.forexlive.com.