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The week ahead: 1-5 September

A look ahead to the major events, economic releases and company news expected next week.

The ECB flag
Source: Bloomberg

The week began with euphoria around possible European Central Bank quantitative easing, but this faded slightly as the week went on as traders began to worry the market had got a little ahead of itself in thinking ECB QE is heading our way.

The coming week is rather an alphabet soup, with PMIs, ADP numbers, GDP and NFPs all on the list. In addition, the Bank of England and ECB are meeting, but no change is expected either from Threadneedle Street or Frankfurt.

Geopolitical risk will still predominate, especially as Vladimir Putin seems keen on keeping Ukraine at the top of the agenda, but with the US on holiday on Monday there is the possibility of another quick rally on equity markets in the UK and Europe.

Economic reports

Monday

HSBC China mfg PMI (August, final), 2.45am: No change is expected to this number, remaining at 50.3 for the month. Market to watch: Global indices, AUD/USD, copper

German GDP (Q2, final), 7am: Growth is forecast to remain unchanged at -0.2% QoQ and 0.8% YoY. Market to watch: DAX, EUR/USD, EUR/GBP

France, German, eurozone mfg PMI (August, final), 8.50am - 9am: These are expected to remain unchanged for the month. Market to watch: EU Stocks 50, DAX, CAC40, EUR/USD, EUR/GBP

UK mfg PMI (August), 9.30am: After a reading of 55.4 in July, the number is forecast to drop back to 55 for August. Market to watch: GBP/USD, EUR/GBP

Tuesday

UK construction PMI (August), 9.30am: After coming in at 62.4 for July, the data is expected to show a slight drop, to 61.2. Market to watch: GBP/USD

US manufacturing PMI (August, final), 2.45pm: This data point is also forecast to remain at its previous reading, at 58. Market to watch: US indices, dollar crosses

Wednesday

China non-manufacturing PMI (August), 2am: From a reading of 54.2 in July, the index is expected to rise to 55.1 for August. Market to watch: global indices, AUD/USD, copper

Australian GDP (Q2), 2.30am: After rising 1.1% QoQ and 3.5% YoY in Q1, growth in the Commonwealth's economy is forecast to slow to 0.4% QoQ and 3% YoY. Market to watch: AUD/USD, S&P/ASX 200

French, German, eurozone services PMIs (August, final), 8.50am - 9am: As with the manufacturing numbers earlier in the week, these indices are not forecast to change. Market to watch: EU Stocks 50, DAX, CAC40, EUR/USD, EUR/GBP

UK services PMI (August), 9.30am: The most important of the UK PMI readings is expected to drop back to 58.45 from 59.1 in July. Market to watch: GBP/USD, EUR/GBP

Eurozone retail sales (July), 10am: This reading is expected to show a contraction of 0.2% MoM. Market to watch: EUR/USD, EUR/GBP

Bank of Canada rate decision (Sept), 3pm: The Canadian central bank is expected to leave rates at 1% for the month. Market to watch: USD/CAD

Federal Reserve Beige Book, 7pm: This informal survey of managers around the US economy should reflect the continued improvement in economic data from the world's largest economy. Market to watch: US indices, dollar crosses

Thursday

Bank of Japan statement (time tbc): It looks like the BoJ's asset purchase programme might need to be fired up again, as household spending continues to drop following the April sales tax. Market to watch: Nikkei 225, USD/JPY, other yen crosses

Bank of England rate decision (Sept), 12pm: Minutes last month showed two policy makers voting for a rate hike, but this meeting is still not expected to show any change in rates. Market to watch: GBP/USD, EUR/GBP

ECB rate decision (Sept), 12.45pm: The ECB is unlikely to move on QE, or indeed on rates, this month, despite the Jackson Hole speech and accompanying notes. With the TLTROs still to be activated (16th September) the likelihood is that Mario Draghi will still hint at further measures but only when the effects of the existing policies become clear. Market to watch: European indices, EUR/USD, EUR/GBP

ADP payroll change (August), 1.15pm: This number is released a day later than usual due to the Labor Day holiday on Monday. The expected figure is 215K, down from 218K last month. Market to watch: global indices, dollar crosses

US initial jobless claims, 1.30pm: After dropping to 298K last week, the figure is expected to bounce back to 303K. Keep an eye out for the four-week moving average number as well, which last week hit its lowest level since late 2006. Market to watch: US indices, dollar crosses

US services PMI (August, final), 2.45pm: This is forecast to remain unchanged from the earlier estimate. Market to watch: US indices, dollar crosses

Friday

US non-farm payrolls (August), 1.30pm: Official US job data is expected to show an increase of 220K jobs this month, from 209K last month, while the unemployment rate drop slightly to 6.1%. Also watch for revisions to the figures for previous months. Market to watch: global indices, all major currency pairs, gold, oil, copper

 

Company announcements

Monday

Berkeley Group

Wednesday

International Consolidated Airlines Group, Genus, Ashtead, Hargreaves Lansdown, Toll Brothers

Thursday

Go-Ahead Group, SuperGroup, easyJet, El Pollo Loco Holdings

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