All times now GMT NOT BST.
Monday Sept 10th:
FR - 07:55 - Industrial Production M/M.
UK - 08:30 - PPI Input & PPI Output M/M.
US - 19:00 - Consumer Credit M/M.
Tuesday Sept 11th:
UK - 08:30 - Trade Balance.
EU - Tentative - ECB President Trichet Speaks.
US - 12:30 - Trade Balance.
UK - 14:30 - Leading Index M/M.
Wednesday Sept 12th:
UK - 08:30 - Average Earnings Index +Bonus Q/Y.
UK - 08:30 - Claimant Count Change.
UK - 08:30 - Unemployment Rate.
EU - 09:00 - Labor Cost Index Q/Q.
EU - 09:00 - Industrial Production M/M.
US - 14:30 - Crude Oil Inventories.
UK - 23:01 - RICS House Price Balance.
Thursday Sept 13th:
EU - 06:45 - Nonfarm Employment Q/Q.
EU - 06:45 - French CPI M/M.
UK - 08:30 - Retail Sales M/M.
US - 12:30 - Unemployment Claims.
Friday Sept 14th:
EU - 06:00 - German CPI M/M.
US - 12:30 - Retail Sales M/M.
US - 12:30 - Core Retail Sales M/M.
US - 12:30 - Current Account.
US - 12:30 - Import Price Index M/M.
UK - 13:15 - Industrial Production M/M.
US - 13:15 - Capacity Utilization Rate.
US - 14:00 - Consumer Sentiment.
US - 14:00 - Business Inventories M/M.
EU - Europe wide
FR - France
UK - United Kingdom
US - United States
GE - Germany
Interest rate statements dominated the headlines last week. Statement was the operative word because the Bank of England surprised many by offering a statement with a no change announcement. It is very rare for the BOE to offer a statement without a change in rates, and the last few times they have done this, rates were cut the following month. This is perhaps unlikely to happen this time, but coupled with the billion pound cash injection last week, at least it seems the Old Lady of Threadneedle is softening her non-interventionist stance.
As expected the ECB kept rates on hold, while keeping their tightening bias. The FOMC meeting next week continues to rise in importance, with the Fed sending out further mixed messages on its intentions. Many are pricing in a quarter point rate cut, but it is what the bank says in their statement, and the markets reaction that could be crucial. Assuming there is a cut, the question on everyones lips is; could there be more cuts to follow, or will this be the only one?
Many voting Fed members went on record last week with hawkish comments. Hoenig said that there is a lack of strong evidence that the financial-market turmoil has infected the economy. Poole said that the Fed officials cannot be slaves to market expectation and that we shouldnt take for granted that the economy is going into nosedive. Anyone relying on a substantial Fed bailout may wish to think again. Fridays weak NFP threw a curveball at the Fed who now have an extremely hard few months ahead of them. Elsewhere oil prices rose to nearly $80 per barrel, on news of potential conflict in the Middle East, and inventories falling sharply.
Notable economic announcements next week are the US trade balance and industrial production figures. These will provide recent data on the strength of the US economy. Well also gain an insight into how well consumers are bearing up in the face of this financial instability, with retail figures from the US and the UK. News that mortgages are set to rise, despite headline rates remaining the same in the UK, may not have time to trickle into these figures.
As we saw on Friday, risks still remain to the downside. The inter bank lending rate has shot up, causing many to question just what they know about each others exposure in the debt market. Therefore a no touch with a 17 day term, 95 points above the S&P 500 spot price, could return value at 8% ROI.
Dave Evans
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