Macroeconomics: The Day Ahead for 25 September

  • Light data schedule features surveys, focus on Ifo Business Climate, ECB heavyweights and Fed’s Kashkari top run of central bank speakers; Evergrande debt issuance impasse, BoJ comments also in focus
  • Germany Ifo Business Climate seen falling further on deteriorating current conditions, read across from pick up in PMIs unreliable
  • UK: PM Sunak’s pushback on climate goals and threat of further HS2 cutbacks underline deep-seated ‘bean counting’ policy headwind to UK infrastructure spending
  • China Evergrande woes a reminder that policy tweaks unlikely to restore property sector confidence without balance sheet reconciliation


Surveys will be the main feature of a light statistical schedule, with Germany’s Ifo Business Climate and the UK CBI Retailing survey to the fore in Europe, and the Chicago Fed National Activity Index and Dallas Fed Manufacturing the only items of any note in the US. The week is going to be long on central bank speakers, with Lagarde’s regular testimony to the European Parliament, and speeches by Villeroy and Schnabel offering plenty of food for thought in terms of the ECB policy outlook, while dove turned arch hawk Kashkari requires particular attention in regards to the Fed. The EU gets this week’s busy schedule of govt bond auctions underway with EUR 4.0 Bln of 11 & 30-yr, and with a whopping USD 134 bln of US 2, 5 & 7-yr to be auctioned Tuesday through Thursday, govt bond yields may see some further upward pressure as market makers factor in a concession for this week’s supply. Otherwise, the overnight news on China Evergrande’s inability to raise new debt once again serves as a reminder that all the tweaks that have been made to legislative and monetary policies do not address the ‘elephant in the room’, i.e. balance sheet reconciliation in the sector, and without this, it is difficult to see how private investors’ confidence will be meaningfully restored.

Germany’s Ifo Business Climate is expected to edge lower to 85.2 from 85.7, with a fall in Current Conditions to 88.0 from 89.0 seen as the primary driver. While the pick-up in Friday’s Services PMI and a slightly higher, but still desultory Manufacturing PMI imply some upside risks, the two surveys often diverge in month to month terms.

In the UK, PM Sunak’s pushback on climate targets and an apparently imminent announcement of further cutbacks to the already curtailed HS2 high speed rail link is sadly symbolic of everything that has been wrong with UK govt spending on infrastructure since the end of WWII. The seemingly deep-seated and Pavlovian instinct to cut or cancel spending on infrastructure at any point where the economy, and by extension govt tax revenues, faces headwinds underlines why it is successive UK governments (of whatever political hue), and not any external factors that have persistently hobbled the economy. Until the UK Treasury can escape the shackles of this deep rooted bean counting mentality, the prospects for the UK economy will continue to be heavily constrained.

RECAP: The Week Ahead – Brief Preview:  

The week’s major data schedule is heavily backloaded but kicks off with Germany’s Ifo, US Consumer Confidence and a host of other surveys, US House Prices, Home Sales and Durable Goods. Thursday and Friday have national and Eurozone CPI, US annual GDP revisions, Personal Income, Japan Tokyo CPI, Industrial Production and Retail Sales, while Saturday sees China’s NBS PMIs. There will be month and quarter end to contend with, while the Mawlid-al-Nabi (Birth of the Prophet Mohammed) will see many Islamic countries during the middle of the week, and Friday sees China close down until 8 October for the Autumn Festival ‘Golden Week’. Central bank speakers are plentiful, with CEE and EM rate decisions expected to see a 75 bps rate hike to 9.50% in Nigeria, but rates on hold in Czechia, Hungary, Mexico and Colombia. Govt bond supply will be plentiful, with the US selling a whopping USD 134 Bln total of 2,5 & 7-yr, and auctions in EU, Germany, Italy, Netherlands and UK, and Japan, Australia and Canada, with the earnings schedule minimalist, with Costco and Nike headlining in the US. Politically the focus will be on a seemingly inevitable US Govt shutdown and any efforts to bring the UAW strike to an end; tensions between Ukraine and Poland (very much related to the upcoming Polish election), as well as increasing signs of Ukraine support ‘fatigue’ in Europe and US, the kick-off to party conference season in the UK, amongst other factors including US/Iran relations.

Commodities markets will continue to keep a close eye on oil and oil product price trends, but above all overwhelmed by a deluge of conferences around the world. To highlight but a few: Energy Trading Week and Future Food Tech in London, IEA Critical Minerals and Clean Energy, and IEA/ECB/EIB Energy Transition and the Economy in Paris, World Chemicals in Berlin, China International Aluminum Week. International Rapeseed in Australia and Globoil India (international edible oil) conference. The IEA also publishes an update to its Net Zero Roadmap.

Eurozone CPI: Base effects will be the key drivers of an expected sharp drop in Germany and sharp rise in Spain, with France seen up a little, and Italy down a little, but all resulting in Eurozone CPI rising 0.5% m/m, but dropping to 4.5% from 5.2% y/y (thanks to the German fall) and core easing to 4.8% from 5.3% y/y.

US PCE deflators are likely to echo CPI: headline rising 0.5% m/m to edge up 0.2 ppt to 3.5% y/y, but core up just 0.2% m/m, with y/y down 0.3 ppt to 3.9%.

Japan’s Tokyo CPI is expected to edge down 0.1 ppt across all measures, but with ‘core core’ still riding high at 3.9%.

To view the full report and to sign up for daily market commentary please email

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2024 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now