Weekly Outlook: 2017, August 27 - September 03

The US dollar was on the back foot across the board in the last full week of August. An update on US GDP, consumer confidence, and the all-important Non-Farm Payrolls stand out.

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1. CB Consumer Confidence: Tuesday, 14:00. A score of 120.3 is on the cards now.
2. ADP Non-Farm Payrolls: Wednesday, 12:15. Payrolls software provider ADP publishes its jobs report for the private sector and always influences markets. The figures released do not always correlate with the official report by the BLS, but they are still eyed. A gain of 178K was seen in July. A similar gain of 186K is projected.
3. US GDP (second release): Wednesday, 12:30. A small upgrade to 2.7% is expected in the second release.
4. Euro-zone CPI: Thursday, 9:00. CPI is predicted to rise to 1.4% y/y while core CPI is expected to remain unchanged.
5. Canadian GDP: Thursday, 12:30. A slower growth rate of 0.1% is on the cards now.
6. US Core PCE: Thursday, 12:30. After core CPI remained unchanged at 1.7% y/y, the core PCE number will likely stand at 1.4% y/y. A rise of 0.1% is on the cards. Note that the report also includes personal spending and personal income.
7. US Pending Home Sales: Thursday, 14:00. A gain of 0.6% is likely.
8. Chinese Caixin Manufacturing PMI: Friday, 1:45. A minor tick down to 51 is forecast.
9. US Non-Farm Payrolls: Friday, 12:30. Expectations stand at a gain of 180K jobs and no change of the unemployment rate, which stood at 4.3%. Wages are expected to rise by 0.2% m/m.
10. US ISM Manufacturing PMI: Friday, 14:00. A small rise to 56.5 is expected.

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EUR/USD was looking good during the last full week of August and remained range-bound. What’s next? The inflation figures stand out as we turn the page into September.

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1. Monetary data: Monday, 8:00. The European Central Bank measures the amount of money in circulation (M3 Money Supply) and private loans. The ECB’s expansionary policies pushed the volume of loans back to growth after a period of declines.
2. German GfK Consumer Climate: Tuesday, 8:00. The score of 10.8 seen in July is the highest in many years.
3. French Consumer Spending: Tuesday, 6:45. Consumer spending surprisingly dropped by 0.8% in June, rose than expected. Figures so far this year have been quite mixed.
4. French GDP: Tuesday, 6:45. According to the initial release for Q2, the French economy grew by 0.5%, a robust rate of growth but slightly below the euro-zone average of 0.6%. This publication will likely confirm the first one.
5. Spanish Flash CPI: Wednesday, 7:00.
6. German CPI: Wednesday, during the morning, with the all-German number at 12:00. In July, prices in Germany advanced by 0.4%, double the early expectations, eventually pushing the euro-zone numbers higher.
7. German Retail Sales: Thursday, 6:00.
8. French CPI: Thursday, 6:45. Similar to Germany, also France’s prices came out higher than expected, but they still slipped by 0.3%.
9. German Unemployment Change: Thursday, 7:55. This report is also the last one before the German elections on September 24th. Another drop will support Chancellor Angela Merkel.
10. CPI (preliminary): Thursday, 9:00. The preliminary numbers for August will shape expectations for the ECB meeting.
11. Unemployment Rate: Thursday, 9:00. An unemployment rate of 9.1% was seen in June, the lowest in 8 years. Another slide is on the cards.
12. Manufacturing PMIs: Friday, 7:15 for Spain, 7:45 for Italy, final figures for France at 7:50, final German numbers at 7:55 and the final euro-zone figure at 8:00.

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GBP/USD was making attempts to recover but did not go anywhere fast and found itself grinding lower. The upcoming week feature the manufacturing PMI as well as other figures.

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1. Nationwide HPI: Tuesday, 6:00. Various housing price indices have been pointing downwards, but Nationwide’s figure has shown a rise of 0.3% in July.
2. BRC Shop Price Index: Tuesday, 23:01. The British Retail Consortium’s measure provides another gauge on consumer activity. It dropped by 0.4% y/y in June.
3. Net Lending to Individuals: Wednesday, 8:30. The level of lending indicates economic activity but also a credit binge that the BOE fears. A rise of 5.6 billion was reported in June, higher than expected
4. Mortgage Approvals: Wednesday, 8:30. This official figure by the BOE has shown stability in the number of approvals at 65K, for the third consecutive month in June.
5. GfK Consumer Confidence: Wednesday, 23:01. This 2000-strong survey by GfK has been leaning lower in the past few months. A disappointing drop to -12 was reported in July, worse than projected.
6. Manufacturing PMI: Friday, 8:30. Markit’s purchasing managers’ indicator for the manufacturing sector beat expectations and reached 55.1 points in July.

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Dollar/yen was leaning lower in a week that saw further political issues for President Trump. Nevertheless, the pair maintains a distance from the 108.10 level which remains critical.

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The last week of August and the first day of September provide a lot of action. A revised measure of GDP, consumer confidence and a short buildup to the Non-Farm Payrolls stand out. Will wages finally rise in the US? The report for August will probably show more of the same. In Japan, we will get industrial output, retail sales, and unemployment. However, politics in the US and geopolitics will move the safe-haven yen more than anything else.

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The Australian dollar stabilized on high ground, consolidating previous gains. What’s next? Australian capital expenditure and Chinese data stand out in a busier week.

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1. Building Approvals: Wednesday, 1:30. A rise of 10.9% in June will probably be followed by a drop now.
2. Construction Work Done: Wednesday, 1:30. We will now receive the data for Q2.
3. HIA New Home Sales: Thursday, 1:00. A rise could be seen now.
4. Chinese official Manufacturing PMI: Thursday, 1:00. A score of 51.4 points was seen in July, within the recent ranges.
5. Private Capital Expenditure: Thursday, 1:30. A rise of 0.3% was seen in Q1 2017, within early expectations.
6. Private Sector Credit: Thursday, 1:30. Growth accelerated to 0.6% in June, after slower months beforehand.
7. AIG Manufacturing Index: Thursday, 23:30. The manufacturing sector continues growing nicely according to the Australian Industry Group, with a score of 56 in July, the highest since April.
8. Chinese Caixin Manufacturing PMI: Friday, 1:45. The Caixin PMI is already an independent measure of the manufacturing sector of Australia’s No. 1 trading partner and tends to have a significant impact on the Aussie. In July, the figure beat expectations and reached 51.1 points. However, this still reflects slower growth than in past years.
9. Commodity Prices: Friday, 6:30. A growth rate of 17.1% was seen in July, below 23.7% that was seen beforehand.

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