Macroeconomics: The Day Ahead for 8 Sep 2023

  • Heavily front loaded data schedule has Japan revised Q2 GDP, wages, Current Account and services survey, UK REC Employment survey, French and Spanish production to digest
  • More Fed speak, Canada labour report and US Consumer Credit ahead, China inflation data on Saturday AM; geopolitics; China/Europe growth worries and general rates uncertainty likely to dominate
  • Japan GDP revision, wages and services survey point to H2 weakness, strengthen case for BoJ to resist calls for easy monetary policy exit
  • China CPI & PPI expected to suggest disinflationary forces easing in terms of a surface read, but base effects the contributor, closer needs to be kept on m/m readings


The week ends with a heavily front loaded data calendar, at least in terms of what might potentially market moving, with Japan dominant via way of a hefty downward revision to Q2 GDP, record Current Account surplus, much weaker than expected Labour Cash Earnings and the Economy Watchers (services) survey, the latter implying recent sector strength is fading quite rapidly. There are also the UK KPMG/REC Employment survey, which implied weakening labour demand and wage pressures, French and Spanish Industrial Production on the ‘to digest’ list. Ahead lie Canada’s labour data and US Consumer Credit and a final barrage of Fed speak ahead of the purdah period next week with the FOMC meeting on 20 September. However the overarching themes of US/China tensions (specifically tech at this point), China’s property woes, concerns about China and Eurozone growth prospects, and ongoing rate outlook uncertainty seem likely to dominate. Tomorrow will also see the release of China’s PPI and CPI data, while next week’s schedule has the ECB meeting and a barrage of data from the US (CPI, PPI, Retail Sales and Industrial Production), China (Retail Sales, Industrial Production, Credit Aggregates and FAI) and the UK (Unemployment, Average Earnings, monthly GDP and accompanying business activity indicators).

Tomorrow’s China CPI and PPI are both expected to rise relative to July, with the CPI rise due to a combination of base effects and a mild rebound in food and energy prices, but the recovery in PPI (expected at -2.9% y/y vs. prior -4.4%) will owe almost everything to base effects (Aug 22 CPI fell to 2.3% from 4.2%), a trend which will persist in coming months. Per se a closer eye will need to be kept on m/m changes in both to see if there is any sign of a demand revival halting what has been a fairly robust disinflationary trend.

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