Weekly Outlook: 2017, September 24 - October 01

[1Finance]

The US dollar rallied on the Fed decision but its strength faded away. What’s next? The German elections, durable goods orders, and several GDP publications stand out as Q3 draws to a close. Here are the highlights for the upcoming week.

1. New Zealand elections: Saturday. The polls indicate that everything is possible.
2. German elections: Sunday, results are due before markets open in Asia. All in all, a victory for Merkel would be positive for the euro, but this is mostly priced in.
3. US CB Consumer Confidence: Tuesday, 14:00. A score of 119.6 is projected.
4. US New Home Sales: Tuesday, 14:00. An increase to 591K is on the cards.
5. US Durable Goods Orders: Wednesday, 12:30. A more modest rise of 0.2% is forecast.
6. New Zealand rate decision: Wednesday, 20:00. The Reserve Bank of New Zealand is expected to leave the interest rate at 1.75% once again. The RBNZ likes to complain about the strength of the currency, and this time, the elections will have a material effect on the exchange rate, thus determining the reaction from Graeme Wheeler and his colleagues. They usually “make the trend their friend”. So, a drop in the NZD could provide an opportunity to push it even lower, while a rise in the currency would be hard to mitigate.
7. US GDP (final): Thursday, 12:30. A small upgrade to 3.1% is on the cards.
8. UK GDP (final): Friday, 8:30. This will likely be confirmed in the final read.
9. Euro-zone inflation (flash): Friday, 9:00. Higher levels of inflation can shorten the process, while protracted low inflation can slow it down.
10. US Core PCE Price Index: Friday, 12:30. A monthly rise of 0.2% is expected.
11. Canadian GDP: Friday, 12:30.

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[1Finance]

EUR/USD dropped to lower ground, but gradually recovered, holding onto known ranges. The German elections provide a strong start to the week, which continues with inflation figures and other data. Here is an outlook for the highlights of this week.

1. German elections: Sunday, results are due before markets open in Asia.All in all, a victory for Merkel would be positive for the euro, but this is mostly priced in.
2. German Ifo Business Climate: Monday, 8:00. Germany’s No. 1 Think-tank’s business climate measure has been beating expectations in the past few months, pointing to optimism about the economy. The figure stood at 115.9 points in August, sticking to the highs.
3. Italian CPI: Tuesday, 9:00. The third-largest economy in the euro-zone saw prices rising by 0.3% in August, better than early predictions. It is the first major country to publish inflation figures this month.
4. Monetary data: Wednesday, 8:00.
5. German GfK Consumer Climate: Thursday, 6:00. A similar level is likely now.
6. Spanish CPI (preliminary): Thursday, 7:00. In August, prices rose by 1.6%.
7. German CPI (preliminary): Thursday: the German states release the data during the morning and the all-German figure is published at 12:00. Germany saw a modest rise in prices in August: 0.1%. The figure from Europe’s largest economy has the biggest weight in the euro-zone CPI.
8. German Retail Sales: Friday, 6:00.
9. German Import Prices: Friday, 6:00.Import prices fell by 0.4% in July.
10. French CPI (preliminary): Friday, 6:45. The second-largest economy in the euro-zone releases its initial estimate a few hours before the all-European number. Prices rose by 0.5% m/m in August. A slower level is likely now.
11. French Consumer Spending: Friday, 6:45. Also in France, consumer spending is quite volatile: sales rose by 0.7% in July after a drop of the same scale in June.
12. German Unemployment Change: Friday, 7:55. Germany enjoys a consistent drop in unemployment. The number of the unemployed dropped by 5K in July.
13. CPI (preliminary): Friday, 9:00. After all four major countries released their data, we get the preliminary estimate for the full 19-country bloc. Headline CPI rose by 1.5% in August, higher than beforehand. Core CPI held its ground at 1.2%.

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