This week, investors will closely monitor a series of crucial economic reports set to be released. These, along with other upcoming reports in the following weeks, will play a pivotal role in influencing the Federal Reserve's decision on monetary policy during their September rate meeting. Are you set?
🇺🇸 August’s Consumer Confidence Index
On Tuesday, August 29, at 17:00 GMT+3, the Conference Board will release August’s Consumer Confidence Index, a pivotal metric that gauges the confidence level of consumers regarding economic activity. The sentiment reflected in this index is crucial because consumer spending, driven by such confidence, accounts for approximately 70% of the US GDP. This makes the Index one of the most vital leading indicators for understanding economic trends.
While the previous reading stood at 117.0, current expectations suggest a decline to 113.4, though it's worth noting that this data may change.
🇺🇸 Q2 2023 GDP Growth Annualized
On Wednesday, at 15:30 GMT+3, the second estimate for the Q2 2023 GDP Growth Annualized will be unveiled. The initial advance estimate, which was published at the end of July, showcased an unexpected rise, with the economy growing at a 2.4% rate as opposed to the anticipated 1.8%.
Given that the data for this report has been revised since the advance estimate was made public, the second figure might hold further surprises, potentially influencing market sentiment. Key assets may also be affected: the EUR/USD and GBP/USD pairs, as well as the SPX500, Nasdaq and Dow Jones indices.
🇪🇺 CPI & Core CPI m/m
Keep an eye on the EU CPI & Core CPI reports set to be released on Thursday, August 31, at 12:00 GMT+3. The Consumer Price Index (CPI) measures the average price change over time that consumers pay for a basket of goods and services, while the Core CPI excludes the volatile food and energy prices.
It's anticipated that the monthly figure will rise while the annual figure will decrease. This development could occur as the EUR/USD pair maintains a bullish bias above 1,0800. The release could either validate this upward trend or trigger a downturn in the pair's quotations.
🇺🇸 August’s Non-Farm Payrolls and Unemployment Rate
On Friday, at 15:30 GMT+3, August’s Non-Farm Payrolls and Unemployment Rate reports will be released. The Non-Farm Payrolls data captures the number of jobs added across nearly all economic sectors, excluding the agricultural sector.
Given that employment and price stability stand as two central mandates for the Federal Reserve, the outcomes of these reports are instrumental in shaping the Fed's monetary policy decisions.
US employers likely added 180,000 jobs over the past month, down slightly from 187,000 in July. This would mark the smallest gain since a decline of 268,000 jobs in December 2020, indicating that the Fed’s rate hikes are having an effect in cooling the labor market. The unemployment rate is projected to hold steady at 3.5%.
🇺🇸 ISM Manufacturing PMI
On Friday, at 17:00 GMT+3, the Institute for Supply Management (ISM) will release its Manufacturing PMI for the month. The previous reading in July registered at 46.4, slightly up from June's 46.0 – the lowest level since May 2020. This represents the lengthiest stretch of contraction since the 2007-2009 Great Recession. While economists surveyed by Reuters had predicted the index would climb to 46.8, the actual data revealed a slightly lower figure.
Notably, though the ISM's analysis paints a somber picture of the manufacturing sector, other hard data implies a different narrative. Federal Reserve data from the previous month indicated a bounce-back in factory production during the second quarter, halting the trend of two successive quarterly drops. For the upcoming release, expectations are set at 46.2.
That's it for this week! 👋
