This week is packed with significant economic events that could shape global markets. Key reports include Canada’s CPI and retail sales, the US’s retail sales, unemployment claims, and the Federal Funds Rate decision, as well as the UK’s CPI and Official Bank Rate announcement. Australia and New Zealand will report employment changes and GDP growth, respectively, while Japan’s BOJ Policy Rate decision is also highly anticipated. These releases provide insights into inflation, economic growth, and labor market conditions, with potential impacts on currencies like CAD, USD, GBP, NZD, AUD, and JPY.
High Impact Economic Events
Tuesday 15:30 (GMT+3) – Canada: CPI m/m (CAD)
Tuesday 15:30 (GMT+3) – USA: Retail Sales m/m (USD)
Wednesday 09:00 am (GMT+3) – UK: CPI y/y (GBP)
Wednesday 21:00 (GMT+3) – USA: Federal Funds Rate (USD)
Thursday 01:45 am (GMT+3) – New Zealand: GDP q/q (NZD)
Thursday 04:30 am (GMT+3) – Australia: Employment Change (AUD)
Thursday 14:00 (GMT+3) – UK: Official Bank Rate (GBP)
Thursday 15:30 (GMT+3) – USA: Unemployment Claims (USD)
Friday 02:30 am (GMT+3) – Japan: BOJ Policy Rate (JPY)
Friday 15:30 (GMT+3) – Canada: Retail Sales m/m (CAD)
Tuesday, September 17
15:30 – Canada: CPI m/m (CAD)
The Consumer Price Index (CPI) is a key measure of inflation, tracking changes in the prices of a fixed basket of goods and services over time as experienced by Canadian consumers. It covers eight major categories: food, shelter, household operations, clothing, transportation, health and personal care, recreation and education, and alcohol and tobacco.
In July, the Consumer Price Index (CPI) rose 2.5% year-over-year, slowing from June’s 2.7% increase. Lower prices for travel services, passenger vehicles, and electricity contributed to the deceleration. Monthly CPI rose 0.4%, driven by a 2.4% increase in gasoline prices. Shelter costs remained high but grew at a slower pace, while five provinces saw slower price growth, particularly in fuel and gasoline.
Analysts predict that the upcoming release will show a 0.1% increase.
15:30 – USA: Retail Sales m/m (USD)
The Retail Sales m/m reflects the change in US retail sales from one month to the next. This indicator is used to assess inflation, and an increase in retail sales can positively influence the value of the US dollar.
In July 2024, US retail and food services sales reached $709.7 billion, a 1.0% increase from June and a 2.7% rise from July 2023. Sales for the May to July 2024 period were up 2.4% year-over-year. Notably, nonstore retailers saw a 6.7% increase, while food services and drinking places grew by 3.4% from July 2023.
Analysts predict a -0.2% reading.
Wednesday, September 18
09:00 am – UK: CPI y/y (GBP)
The most common method for assessing inflation is the annual inflation rate, which looks at price changes over a 12-month period by comparing the current month’s prices with those from the same month the previous year. CPIH is the most comprehensive inflation measure, including the Consumer Prices Index (CPI) plus owner occupiers’ housing costs (OOH) and Council Tax.
In July 2024, the UK’s CPIH rose by 3.1% year-on-year, up from 2.8% in June, while CPI increased by 2.2% in the 12 months to July 2024, up from 2.0%. Monthly, CPIH remained flat, and CPI fell by 0.2%. Housing and household services contributed the most to the rise, while restaurants and hotels had a downward impact. Core CPIH rose by 4.1% annually, and core CPI increased by 3.3%, both slightly lower than in June.
Economists project a 2.2% increase.
21:00 – USA: Federal Funds Rate (USD)
The Federal Reserve adjusts monetary policy by changing its target range for the federal funds rate, which impacts overnight borrowing rates for banks. Lowering the target, or “easing,” reduces interest rates to stimulate the economy during slow growth, low inflation, or high unemployment. Raising the target, or “tightening,” increases rates to cool an overheating economy, high inflation, or low unemployment. These rate changes affect broader financial conditions, influencing household and business spending and ultimately impacting economic activity, employment, unemployment, and inflation.
In July 2024, the Federal Reserve maintained its target range for the federal funds rate at 5.25% to 5.5% to support its goals of maximum employment and 2% inflation.
Analysts anticipate a rate cut of 25 basis points.
Thursday, September 19
01:45 am – New Zealand: GDP q/q (NZD)
New Zealand’s Gross domestic product (GDP) is the official measure of economic growth. It is calculated using two methods: the production approach, which measures the total value of goods and services produced minus production costs, and the expenditure approach, which measures final purchases of goods and services, adding exports and subtracting imports. An increase in GDP may positively impact the quotes of the New Zealand dollar (NZD).
In the March 2024 quarter, New Zealand’s GDP grew by 0.2% after a 0.1% decline in December. Eight of 16 industries saw growth, led by real estate and electricity, while construction and manufacturing fell. GDP per capita dropped 0.3%, its sixth consecutive decline. The expenditure measure rose 0.1%, driven by household and visitor spending, with imports and capital investment down.
Analysts anticipate a decline of 0.4%
04:30 am – Australia: Employment Change (AUD)
The Australia Employment Change tracks the monthly variation in the number of officially employed individuals in the country. An increase in employment indicates a stronger labor market and can positively influence the value of the Australian dollar.
In July 2024, Australia’s unemployment rate increased to 4.2%, with employment rising to 14.5 million and the participation rate reaching 67.1%.
Economists expect an addition of 25,500 employed Australians.
14:00 – UK: Official Bank Rate (GBP)
The Monetary Policy Committee (MPC) sets monetary policy to achieve a 2% inflation target while supporting sustainable economic growth and employment. It adopts a forward-looking, medium-term strategy to ensure inflation remains stable and sustainable.
At its meeting concluding on 31 July 2024, the MPC voted 5–4 in favor of reducing the Bank Rate by 0.25 percentage points to 5%. Four members opted to keep the rate unchanged at 5.25%.
Economists anticipate that the official bank rate will stay unchanged at 5.00%.
15:30 – USA: Unemployment Claims (USD)
An initial claim is filed by an unemployed individual seeking eligibility for unemployment insurance after leaving a job. This count serves as a leading economic indicator, reflecting labor market conditions. However, because these are weekly administrative data, they can be volatile and challenging to adjust seasonally.
In the week ending August 31, 2024, US seasonally adjusted initial unemployment claims decreased by 5,000 to 227,000. The 4-week moving average also dropped to 230,000. The insured unemployment rate remained at 1.2%, with 1.838 million people receiving benefits, down 22,000 from the previous week.
Analysts anticipate that unemployment claims will increase to 232,000.
Friday, September 20
02:30 am – Japan: BOJ Policy Rate (JPY)
The Bank of Japan’s monetary policy aims to achieve price stability, which is crucial for supporting economic activity. Price stability helps individuals and firms make informed decisions about consumption and investment, ensuring efficient resource allocation. To this end, the Bank set a 2% inflation target (CPI) in 2013 and remains committed to reaching this goal as soon as possible.
At its July 2024 meeting, the Bank of Japan (BoJ) increased its key short-term interest rate to approximately 0.25%, up from the previous range of 0% to 0.1% established in March.
Economists anticipate that the Bank of Japan (BOJ) will not raise interest rates at this week’s policy meeting.
15:30 – Canada: Retail Sales m/m (CAD)
Canada’s Retail Sales track the month-to-month changes in the value of goods sold by retail stores. This measurement is based on data collected from thousands of retail outlets, which is then scaled up to represent the entire country’s retail activity.
This indicator serves as a gauge for consumer spending and inflation. An uptick in retail sales can positively impact the Canadian dollar’s (CAD) exchange rates.
Retail sales fell by 0.3% to $65.7 billion in June, led by declines in motor vehicle and parts dealers. However, core retail sales rose 0.4%.
Analysts see an increase of 0.3% in this week’s reporting.
Company Earnings (September 16 – 20)
Monday, September 16: BUR (Burford Capital Limited)
Tuesday, September 17: FERG (Ferguson Enterprises Inc.)
Wednesday, September 18: GIS (General Mills, Inc.)
Thursday, September 19: FDX (FedEx Corporation)
Thursday, September 19: LEN (Lennar Corporation)
Friday, September 20: GFI (Gold Fields Limited)
Conclusion
In conclusion, this week presents a series of critical economic events and data releases that could significantly impact global markets. From inflation figures in Canada, the UK, and the US to key interest rate decisions from the Federal Reserve, the Bank of Japan, and the Bank of England, traders and investors will be closely watching for market-moving trends. Additionally, reports on GDP, employment changes, and retail sales will provide valuable insights into economic growth and labor market strength, influencing major currencies such as CAD, USD, GBP, NZD, AUD, and JPY.