General

Week Ahead - US Markets flirt with correction territory, Big data in focus

George Walker, Friday, 25 September 2020



September has seen US markets driven lower into correction territory as investors book profits as a result of uncertainty and a potential second wave of the coronavirus pandemic. This week’s macro data could be critical in determining whether we slide deeper into the correction or show signs of an economic recovery to strengthen investor sentiment.

With critical data such as GDP and NFP ahead, here’s what to watch!

The coming week could determine whether the sell-off continues as investors focus on macro data to indicate the strength of the recovery during the worst economic downturn in a century.

There is not a lot in the way of notable data releases on Monday so whether markets open on a positive or negative sentiment could be a result of news flow over the weekend. With Coronavirus cases seemingly on the rise, could we see governments setting further social restrictions?

As we move into Tuesday, Consumer Price Index (CPI) data released from Japan overnight and Germany in the afternoon could affect the native currencies. Central banks have begun using language relating to inflation when making monetary policy decisions recently and as CPI data is a major gauge, the release of this data could cause exaggerated volatility.

 

1st US Presidential Election Debate

Tuesday also sees the first of the US Presidential election debates. This will have the attention of financial markets as traders and investors attempt to decide who will be preferred at the helm of the world’s largest economy. There will be many important topics debated and promises made so this will be an event not to be missed!

During the early hours of Wednesday morning we see Manufacturing and Non-manufacturing data released from China which collectively will give an indication as to the strength of the Chinese economy.

 

UK Gross Domestic Product

Gross Domestic Product figures from the UK could be key to the performance of the UK 100 and GBP during the morning session. The UK economy has seen the biggest fall in GDP on record as a result of the coronavirus pandemic and is key in the Bank of England’s decision making particularly when contemplating negative interest rates. The economy began to bounce back as industries such as retail and housebuilding benefitted from restrictions being eased by the UK Government however, with additional restrictive measures being introduced, could we see GDP begin to fall once again?

The popular currency pairing EURUSD could be in focus during afternoon trading. Unemployment data from Germany and preliminary CPI numbers from the Euro Zone precede GDP data from the US as the ADP Employment change figures of seen a s precursor for the Nonfarm Payrolls on Friday. When trading data like this, it is worth bearing in mind that the stronger the figures, the less chance there could be that central banks will loosen monetary policy by either reducing interest rates of providing liquidity so generally speaking, a beat of expectations could viewed as bullish whereas a miss could be viewed as bearish.

Canadian GDP could also be worth keeping an eye on as the last meaningful release on Wednesday.

We kick of Thursday with CPI and Retail Sales data from Switzerland ahead of a barrage of Manufacturing PMI data from Germany and the Euro Zone, the UK, US and Canada. Manufacturing contributes a large proportion of a countries GDP so could have a bearing on currencies.

Initial and Continuing Jobless claims from the US could also be worth monitoring for those who trade the USD.

 

US Nonfarm Payrolls

As usual, the first Friday of the month sees the release of the Nonfarm Payroll jobs data from the US. This remains one of the most volatile economic macro data releases and potentially even more so following the renewed focus on US employment by the Federal Reserve. Traders will need to make a note of this at 13:30 BST as we can see large spikes in a very short period after the announcement. Headline numbers are important, as are any revisions to previous figures and majority of global markets are affected by these figures. It goes without saying that all eyes will be focused on this as one of the standout trading events of the week.

All times indicated are BST.


ECONOMIC CALENDAR (all times are BST)

Monday, 28th September

06:00 JPY Coincident Index
06:00 JPY Leading Economic Index
15:30 USD Dallas Fed Manufacturing Business Index

UK Company Announcements:

Chesnara

US Company Announcements:

N/A

Tuesday, 29th September – First US Presidential Debate

00:30 JPY Tokyo Consumer Price Index
00:30 JPY Tokyo CPI ex Fresh Food
00:30 JPY Tokyo CPI ex Food, Energy
10:00 EUR Services Sentiment
10:00 EUR Consumer Confidence
10:00 EUR Industrial Confidence
10:00 EUR Business Climate
10:00 EUR Economic Sentiment Indicator
13:00 GER Consumer Price Index Preliminary
13:00 GER Harmonized Index of Consumer Prices Preliminary
13:30 USD Redbook Index
14:00 USD S&P/Case-Shiller Home Price Indices
14:15 USD Fed’s Williams Speech
15:00 USD Consumer Confidence
18:00 USD Fed’s Williams Speech
21:30 USD API Weekly Crude Oil Stock
22:45 NZD Building Permits

UK Company Announcements:

Card Factory
Greggs

US Company Announcements:

Micron Technology Inc
IHS Markit Ltd

Wednesday, 30th September

00:50 JPY Retail Trade
00:50 JPY Large Retailers’ Sales
00:50 JPY Industrial Production Preliminary
01:00 NZD ANZ Business Confidence
01:00 NZD ANZ Activity Outlook
02:00 CNY Non-Manufacturing PMI
02:00 CNY NBS Manufacturing PMI
02:30 AUD Building Permits
02:45 CNY Caixin Manufacturing PMI
07:00 GBP Gross Domestic Product
07:00 GBP Current Account
07:00 GBP Total Business Investment
07:00 GBP Nationwide Housing Prices
07:00 GER Retail Sales
08:00 CHF KOF Leading Indicator
08:55 GER Unemployment Rate
08:55 GER Unemployment Change
09:00 CHF ZEW Survey – Expectations
09:30 GBP BoE’s Haldane Speech
10:00 EUR Consumer Price Index Preliminary
10:00 EUR Consumer Price Index – Core Preliminary
13:15 USD ADP Employment Change
13:30 USD Gross Domestic Product Price Index
13:30 USD Gross Domestic Product Annualized
13:30 USD Core Personal Consumption Expenditures
13:30 USD Personal Consumption Expenditures Prices
13:30 CAD Industrial Production Price
13:30 CAD Gross Domestic Product
14:00 CHF SNB Quarterly Bulletin
14:45 USD Chicago Purchasing Managers’ Index
15:00 USD Pending Home Sales
15:30 USD EIA Crude Oil Stocks Change

UK Company Announcements:

Premier African Minerals
888 Holdings
Boohoo.com
Compass Group

US Company Announcements:
N/A

Thursday, 1st October

00:50 JPY Tankan Large Manufacturing Index
00:50 JPY Tankan Large Manufacturing Outlook
00:50 JPY Tankan Non-Manufacturing Index
00:50 JPY Tankan Large All Industry Capex
01:30 JPY Jibun Bank Manufacturing
07:30 CHF Consumer Price Index
07:30 CHF Real Retail Sales
08:55 GER Markit Manufacturing PMI
09:00 EUR Markit Manufacturing PMI
09:30 GBP Markit Manufacturing PMI
10:00 EUR Producer Price Index
10:00 EUR Unemployment Rate
12:30 USD Challenger Job Cuts
13:30 USD Personal Consumption Expenditures – Price Index
13:30 USD Core Personal Consumption Expenditure – Price Index
13:30 USD Personal Income
13:30 USD Personal Spending
13:30 USD Initial Jobless Claims
13:30 USD Continuing Jobless Claims
14:30 CAD Markit Manufacturing PMI
14:45 USD Markit Manufacturing PMI
15:00 USD ISM Manufacturing PMI
15:00 USD ISM Manufacturing Prices Paid
15:00 USD ISM Manufacturing New Orders Index
15:00 USD ISM Manufacturing Employment Index
15:30 USD EIA Natural Gas Storage Change
22:00 NZD ANZ – Roy Morgan Consumer Confidence

UK Company Announcements:

N/A

US Company Announcements:
Pepsico Inc

Friday, 2nd October

00:30 JPY Jobs / Applicants Ration
00:30 JPY Unemployment Rate
02:30 AUD Retail Sales
06:00 JPY Consumer Confidence Index
13:30 USD Nonfarm Payrolls
13:30 USD Average Hourly Earnings
13:30 USD Average Weekly Hours
13:30 USD Labor Force Participation Rate
13:30 USD Unemployment Rate
15:00 USD Michigan Consumer Sentiment Index
15:00 USD Factory Orders
18:00 USD Baker Hughes US Oil Rig Count

UK Company Announcements:

N/A

US Company Announcements:
N/A

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