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Week Ahead – Fed Needs More Data

What will the jobs report tell us?

The build-up to the Jackson Hole symposium last week was quite tense. Investors have spent the weeks since the July Federal Reserve meeting celebrating the “dovish pivot” and then in the days leading up to Powell’s speech, doubt started to creep in. As it turned out, for good reason.

Policymakers have spent weeks trying to convince investors that there was no dovish pivot, to no avail. So it was up to Powell to reinforce the Fed’s commitment to bringing inflation back to target and I think there’s little doubt he did it. There was no room for error and his speech ensured the message was crystal clear.

In referencing other data points, one thing he achieved is intense scrutiny of all incoming US economic data. And next week brings the big one; the jobs report. Investors will no doubt scrutinise every element of it for any indication that the Fed could take its foot off the brake in September. After Powell successfully reset expectations, the coming weeks could be very different from those we’ve just experienced.


The Fed is sticking to the hawkish script and future rate hikes will depend on how quickly inflation eases and the economy weakens.  It’s a busy week filled with more Fed speak and key manufacturing and labour market readings.  The main event of the week will be the August employment report, but many traders will also pay a lot of attention to how fast manufacturing activity will fall towards contraction territory.

The nonfarm payroll report is expected to show the pace of hiring slowed from a robust July payroll count of 528,000 to 300,000 jobs in August. The ISM manufacturing report is expected to weaken from 52.8 to 52.1, as stockpiles continue to mount for many manufacturers.

Fed speak begins on Monday with Fed’s Brainard. Tuesday we will hear from Barkin and Williams.  On Wednesday, Mester will talk about the economic outlook and Bostic will discuss fintech in financial inclusion. Bostic will speak again on Thursday to business school students.


A lot of economic data is due from around the euro area next week with the highlight no doubt being the inflation figures. Initially, this will come from individual countries including Spain and Germany on Tuesday before France releases its number early Wednesday followed by the eurozone as a whole shortly after. This is important as the individual releases offer insight into what we can expect from the bloc as a whole.

Reuters reported Friday that some ECB policymakers want to discuss a 75 basis point rate hike next month which could shift the conversation in that direction between now and then.

Aside from this, we’ll get final manufacturing PMIs, unemployment, retail sales and more. As ever, a lot of focus will remain on the energy situation, in particular Nord Stream 1 maintenance that starts Wednesday and lasts three days. Any hint of delays could cause another surge in gas prices.


A long bank holiday weekend ahead for the UK and people will need it after Ofgem confirmed the energy price cap will rise by 80% in October. If the UK isn’t already in recession, it will be soon.

Light on the data front next week, with the final manufacturing PMI on Thursday the only release of note.


Next week offers unemployment on Wednesday and the manufacturing PMI on Thursday. Unemployment is expected to rise from 3.9% to 4.1% in July, perhaps a sign of sanctions starting to bite in the labour market. The rouble remains around 20% higher against the dollar compared to before the war in Ukraine.

South Africa

No major economic releases next week. Inflation hit 7.8% last month which leaves the SARB in an uncomfortable position ahead of the next meeting on 22 September, with another 75 basis point hike looking likely.


Quarterly GDP is expected to accelerate to 7.5% in the second quarter, even as inflation runs at 80%. President Erdogan will be hoping the fact that the economy is holding up will see him and his party through the election next year. Manufacturing PMI is the only other notable release.


A lot to look forward to next week starting with an appearance by SNB Chairman Thomas Jordan at Jackson Hole on Saturday. The central bank isn’t averse to catching markets off guard so traders will be following his comments with keen interest. There’s plenty of data next week including the KOF indicator on Tuesday and inflation, retail sales and the manufacturing PMI on Thursday.


The August manufacturing PMI, non-manufacturing PMI and composite PMI will be released on 31 August, while the Caixin manufacturing PMI will be released on 1 September. The recent impact on water and electricity caused by the hot weather in China may have negatively affected the economic data in August, which could lead to some disappointing figures.


Next week brings quarterly GDP data for Q1 and the manufacturing PMI for August.

Australia & New Zealand

A selection of data on offer next week with retail sales up first on Monday followed by building approvals Tuesday and the manufacturing PMI on Thursday. A 50 basis point hike at the next RBA meeting is still viewed as likely.

Only tier two and three data on offer from New Zealand next week.


The divergent attitude of the Fed and the Bank of Japan toward the fundamentals of the rate hike outlook continues to support USD/JPY.

A number of important economic indicators will be released over the next week covering the labour market, industrial output, retail sales and manufacturing. We’ll also hear from BoJ Board Member Junko Nakagawa on Wednesday.


The only data release next week is the PMI on Friday.

Economic Calendar

Saturday, Aug. 27

Economic Data/Events

  • China industrial profits
  • Last day of the Kansas City Fed’s annual Economic Policy Symposium in Jackson Hole

Sunday, Aug. 28

Economic Data/Events

  • No major events or economic releases

Monday, Aug. 29

Economic Data/Events

  • Australia retail sales
  • Japan leading index, coincident index
  • Sweden GDP
  • Turkey trade balance, economic confidence
  • Elon Musk and Ukraine President Volodymyr Zelenskiy expected to speak at the ONS conference
  • Markets are closed in London due to the UK’s Summer Bank Holiday
  • ECB Chief Economist Lane and Riksbank Deputy Governor Floden to speak at the Central Bank Research Association’s annual meeting in Barcelona

Tuesday, Aug. 30

Economic Data/Events

  • US Conference Board consumer confidence
  • Australia building approvals
  • Chile unemployment
  • Czech Republic GDP
  • Euro Zone economic confidence, consumer confidence
  • Germany CPI
  • India Bloomberg economic survey
  • Japan unemployment
  • Mexico international reserves, unemployment
  • Spain CPI
  • New York Fed President Williams speaks with the Wall Street Journal about the US economic outlook
  • ECB’s Holzmann, Stournaras, Muller and Wunsch speak about “Inflation: Can Central Banks Cope?” at the Alpbach Forum in Austria

Wednesday, Aug. 31

Economic Data/Events

  • Russia’s Gazprom to halt gas flows through the key Nord Stream pipeline for three days of maintenance
  • Australia construction work, private sector credit
  • Brazil unemployment
  • Chile industrial production
  • China PMI
  • Eurozone CPI
  • Poland CPI
  • Canada GDP
  • Finland GDP
  • India GDP
  • Turkey GDP
  • Germany unemployment
  • India eight infrastructure industries
  • Japan industrial production, retail sales, consumer confidence index
  • New Zealand building permits, business confidence
  • Russia unemployment
  • Singapore money supply
  • South Africa trade balance
  • Thailand trade, BoP, capacity utilization
  • EIA crude oil inventory report
  • Cleveland Fed President Mester speaks on the outlook for the economy and monetary policy at an event hosted by the Dayton Area Chamber of Commerce
  • Atlanta Fed President Bostic speaks at the Georgia Fintech Academy about the role of fintech in promoting financial inclusion
  • Riksbank Deputy Governor Breman speaks at a seminar about the Swedish economy

Thursday, Sept. 1

Economic Data/Events

  • US construction spending, ISM manufacturing, S&P final manufacturing PMI reading, initial jobless claims
  • Eurozone manufacturing PMIs
  • Australia PMIs
  • India manufacturing PMI
  • South Africa manufacturing PMI
  • Thailand manufacturing PMI
  • UK manufacturing PMI
  • China Caixin manufacturing PMI
  • Eurozone unemployment
  • Germany manufacturing PMI
  • Hungary GDP, One-Week Deposit Rate
  • Italy unemployment, GDP
  • Japan capital spending, vehicle sales, company profits, PMI
  • New Zealand house prices
  • Thailand business sentiment index

Friday, Sept. 2

Economic Data/Events

  • US August change in employment: 300K expected v 528K prior, factory goods, durable goods
  • Euro Zone PPI
  • Japan monetary base
  • Singapore electronics sector index, PMI
  • Spain unemployment
  • Thailand foreign reserves, forward contracts
  • The UK leadership ballot closes in the evening with the winner being announced on Sept 5th

Sovereign Rating Updates

  • Cyprus (S&P)
  • Spain (DBRS)
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