MNI Global Week Ahead - Central Banks and UK Data In Focus

Sep-12 21:32By: Emil Lundh

See below for the key events in developed and emerging markets next week:

Developed Markets

TUESDAY - UK Labour Market Data

Official labour market data is expected to continue to show mixed signals. 3m/3m employment is expected to increase by over 200k again in the 3-months to July while the flash monthly payrolls print is expected to modestly decline by around 11k in August (similar to the 8k flash reading). Wage data, however, continues its decline - and note that this was cited as one of the reasons that Governor Bailey gave for voting for a cut in August. The analyst previews that we have read so far are split between private regular AWE at 4.6% or 4.7% Y/Y in the 3-months to July. This would be a deceleration from the 4.79%Y/Y rate seen in the 3-months to June and if towards the bottom end of that range could be close to the BOE's Q3 forecast of 4.62% two months ahead of time. Most analysts expect the unemployment rate to continue to round to 4.7% in the 3-months to July (it was 4.66% unrounded in the 3-months to June) while some expect a tick up to 4.8%.

WEDNESDAY - UK August Inflation Data

Headline CPI is expected to remain unchanged on a rounded basis at 3.8%Y/Y (from 3.83%Y/Y in July). The BOE's August MPR forecast is for 3.79%Y/Y. The BOE's unrounded July forecast was only 7 hundredths below the outturn with services and food the more notable upside contributors. The analyst previews that we have read look for the major aggregates to broadly come in line with the BOE's forecasts (albeit with petrol prices a bit higher). Services CPI is expected to decelerate driven by a pullback in travel services (particularly air fares) with a fall to around 3.8%Y/Y from 4.0%Y/Y expected. Food inflation is expected to increase to varying degrees, but the Y/Y rate is expected to accelerate to a smaller degree than in recent months but to move to 5% or above for the first time.

WEDNESDAY - BOC Decision

The Bank of Canada is expected to cut its benchmark overnight rate by 25bp to 2.50% on September 17. This comes after three consecutive holds, amid a period in which activity and labour market data proved more resilient than expected in the face of the US-Canada trade conflict. However, most major data released since the July decision have surprised to the weak side, including the latest labour market report. Markets currently imply an over 80% chance of a cut at this meeting, and while some analysts eye Tuesday's inflation release as a potential complicating factor, it would probably have to surprise materially to sway the decision.

WEDNESDAY - Fed Decision

The Federal Reserve is set to resume its easing cycle at the September 16-17 meeting with a 25bp cut to the funds rate range to 4.00-4.25%. The decision to cut after a 5-meeting pause was well-telegraphed by Chair Powell, whose Jackson Hole speech described a “shifting balance of risks” toward a weaker labor market that “may warrant adjusting our policy stance”. The updated quarterly projections aren’t likely to bring many changes to the macroeconomic variables, but as usual the signal sent from the Fed rate “Dot Plot” will garner attention. A Committee split between expecting one or two further cuts this year is likely, keeping each of the remaining meetings of 2025 “live”. The Statement will downgrade the description of the labor market to reflect a rise in the unemployment rate and poor payrolls growth, and is likely to include at least one dissent to the rate decision. But with a Committee that is fairly divided on the way forward, Powell will be noncommittal on future action, reiterating that policy is not on a preset course, and upcoming decisions will be data-dependent.

THURSDAY - New Zealand Q2 GDP

Q2 NZ GDP is released on Thursday September 18 and is likely to be weak as the economy stalled in the quarter. The RBNZ is forecasting a 0.3% q/q decline. Quarterly data already released were generally weak with manufacturing sales volumes contracting 2.9% q/q, merchandise export volumes down 3.7% q/q and building volumes -1.8% q/q On the positive side, Q2 real retail sales rose 0.5% q/q.

THURSDAY - Norges Bank Decision

Based on the analyst previews we have seen so far, consensus still leans in favour of a 25bp Norges Bank rate cut next Thursday. We think it is a very close call, but currently lean against consensus in favour of a hold. Inflation was a little stronger-than-expected in August, and the Q3 Regional Network Survey (alongside the Q2 GDP report) does not portray a mainland economy that is in desperate need of further easing. Additionally, Governor Wolden Bache has guided that the June MPR rate path was consistent with “one or two” more cuts this year, keeping the door open to a September hold. If rates are held on Thursday, we expect soft guidance for a 25bp cut in December. On the other hand, if a cut is delivered, the likelihood of a subsequent cut in December will have been significantly dampened. While the rate decision is uncertain, analysts agree that the September MPR rate path will be revised higher relative to June. Although market pricing still tilts in favour of a cut, positioning through the week has clearly been in a hawkish direction. 2-year NOK swap rates are up 18bps from Tuesday’s 3.78% low, and are 12bps above last Friday’s 3.84% close.

THURSDAY - Bank of England Decision

Both labour market data and CPI data will be available via pre-release access to MPC members on Monday morning, and both data releases are important for future monetary policy despite markets pricing in only around a 40% probability of a rate cut this year (and not fully pricing a 25bp cut until April 2026). However, the focus at the September meeting will not be on Bank Rate (which is expected to remain on hold at 4.00% with most expecting Dhingra and Taylor to vote for a 25bp cut and no substantial changes to guidance. Instead, the annual decision on the APF stock reduction (QT) will be the headline for the year from October 2025 to September 2026. From the 17 sell side previews that we have read the median expectation is for a GBP70bln annual reduction (GBP69bln median at the time of writing). This would be a smaller total APF reduction than the GBP100bln seen in the 24/25 year but would imply active sales of around GBP20-21bln, a pace around 50% more than the GBP13bln this year (due to smaller redemptions in the upcoming year). Analysts are split between whether there will also be a skew away from long-dated gilts being sold. And there is a large range of estimates for the size of the APF reduction. Some analysts are looking for active sales to be entirely suspended, while others expect the GBP100bln total programme size to be maintained. The MNI Markets team notes that there is clear uncertainty around this and given that the size of the balance sheet is to approach the top of the PMRR range through passive reduction alone, we would argue that either active sales continuing at their current pace or being suspended completely would be the optimal position for the market. Note that the OBR will be watching the decision closely as its assumptions on the size of active QT going forward feed into the calculations for the government's fiscal headroom in the November Budget.

FRIDAY - Bank of Japan Decision and August Inflation

The BoJ is expected to remain on hold next week. The central bank has stated that it is in wait and see mode, as it wants to assess the impact of the US-Japan trade deal on the economy. Its bias remains to tighten policy further. The other uncertainty is around the local political backdrop, with PM Ishiba standing down last weekend. LDP elections are scheduled for early Oct.

Nationwide Headline CPI pressures are forecast to have eased for August. This was the tone from the Tokyo August print. Softer utility prices are a near term headwind, with energy subsidies reintroduced. The market expects the August National headline CPI to be 2.85y/y from 3.1% in July. Core inflation, ex fresh food, energy, is expected to print at 3.3%y/y, only down a touch from the 3.4% pace seen in July. As usual, services price trends will be watched.

Emerging Markets

MONDAY - Key Turkish Court Ruling

On Monday, a court in Ankara will decide whether to overturn the CHP's congress in 2023 over alleged procedural irregularities. The constitution assigns the authority to oversee elections, including party congresses, to the Supreme Election Board, which has already endorsed Ozgur Ozel’s leadership. However, the Ankara court could still annul the congress on procedural grounds, which would lead to Ozel being stripped of the CHP chairmanship. See our full report here.

WEDNESDAY - BI Decision (Indonesia)

Bank Indonesia's decision is announced on September 17 and we expect it to be on hold given it cut rates 25bp in July and August, and political instability and fiscal uncertainty have driven the rupiah weaker. There has been a broad-based softening of the IDR with USDIDR up 1.4% and the IDR NEER 0.7% lower since the August 20 decision. With inflation firmly within the 1.5-3.5% target band, FX stability remains the focus of the central bank.

WEDNESDAY - COPOM Decision (Brazil)

The Copom is widely expected to keep its Selic rate at 15.00% for a second consecutive meeting on Wednesday, as it maintains its high for longer stance. There are unlikely to be any surprises in the post-meeting statement, given the firm guidance of maintaining the Selic rate at current levels for “a very prolonged period” to ensure the convergence of inflation to target. Many analysts see the Selic rate remaining on hold through year-end, with the easing cycle only beginning in the first quarter of next year.

THURSDAY - SARB Decision (South Africa)

A vast majority of analysts expect the SARB to keep the repo rate unchanged at 7.00%. Inflation is expected to trend higher in the second half of 2025 while the bank's preference for a stricter, lower inflation target of 3.0% also reinforces the case for holding rates steady.

Date	GMT/Local	Impact	Country	Event
15/09/2025	0200/1000	***	CN	Fixed-Asset Investment
15/09/2025	0200/1000	***	CN	Retail Sales
15/09/2025	0200/1000	***	CN	Industrial Output
15/09/2025	0200/1000	**	CN	Surveyed Unemployment Rate M/M
15/09/2025	0900/1100	*	EU	Trade Balance
15/09/2025	1130/1330		EU	ECB Schnabel At EIB Chief Econ Meeting
15/09/2025	1230/0830	**	CA	Monthly Survey of Manufacturing
15/09/2025	1230/0830	**	CA	Wholesale Trade
15/09/2025	1230/0830	**	US	Empire State Manufacturing Survey
15/09/2025	1300/0900	*	CA	CREA Existing Home Sales
15/09/2025	1530/1130	*	US	US Treasury Auction Result for 13 Week Bill
15/09/2025	1530/1130	*	US	US Treasury Auction Result for 26 Week Bill
15/09/2025	1810/2010		EU	ECB Lagarde at Institut Montaigne Paris
15/09/2025	-		US	FOMC Meetings with S.E.P.
16/09/2025	0600/0700	***	GB	Labour Market - AWE & Unemployment
16/09/2025	0600/0700	***	GB	Labour Market - AWE & Unemployment
16/09/2025	0600/0700	***	GB	Labour Market - Payrolls & Claimants
16/09/2025	0600/0700	***	GB	Labour Market - Payrolls & Claimants
16/09/2025	0800/1000	***	IT	HICP (f)
16/09/2025	0900/1100	***	DE	ZEW Current Expectations Index
16/09/2025	0900/1000	**	GB	Gilt Outright Auction Result
16/09/2025	0900/1100	**	EU	EZ Industrial Production
16/09/2025	1215/0815	**	CA	CMHC Housing Starts
16/09/2025	1230/0830	***	CA	CPI
16/09/2025	1230/0830	***	US	Retail Sales
16/09/2025	1230/0830	**	US	Import/Export Price Index
16/09/2025	1230/0830	***	US	Retail Sales
16/09/2025	1255/0855	**	US	Redbook Retail Sales Index
16/09/2025	1315/0915	***	US	Industrial Production
16/09/2025	1400/1000	*	US	Business Inventories
16/09/2025	1400/1000	**	US	NAHB Home Builder Index
16/09/2025	1400/1000	*	US	Business Inventories
16/09/2025	1700/1300	**	US	US Treasury Auction Result for 20 Year Bond
16/09/2025	-		CA	Bank of Canada Meeting
17/09/2025	0600/0800	**	SE	Unemployment
17/09/2025	0600/0700	***	GB	Consumer inflation report
17/09/2025	0730/0930		EU	ECB Lagarde at ECB Annual Research Conference
17/09/2025	0800/1000		EU	ECB Cipollone At Associazione Bancaria Italiana EC Meeting
17/09/2025	0900/1100	***	EU	EZ HICP Final
17/09/2025	1100/0700	**	US	MBA Weekly Applications Index
17/09/2025	1115/1315		EU	ECB Cipollone Speaks at Netherlands Central Bank Resilience Conference
17/09/2025	1230/0830	*	CA	International Canadian Transaction in Securities
17/09/2025	1230/0830	***	US	Housing Starts
17/09/2025	1230/0830	***	US	Housing Starts
17/09/2025	1345/0945	***	CA	Bank of Canada Policy Decision
17/09/2025	1430/1030	**	US	DOE Weekly Crude Oil Stocks
17/09/2025	1430/1030		CA	BOC press conference
17/09/2025	1430/1030	**	US	US DOE Petroleum Supply
17/09/2025	1800/1400	***	US	FOMC Statement
18/09/2025	2245/1045	***	NZ	GDP
18/09/2025	-		NO	NorgesBank Meeting
18/09/2025	-		JP	Bank of Japan Meeting
18/09/2025	2350/0850	*	JP	Machinery orders
18/09/2025	0130/1130	***	AU	Labor Force Survey
18/09/2025	0710/0910		EU	ECB Lagarde Video Message at Women Leadership Summit
18/09/2025	0800/1000	***	NO	Norges Bank Rate Decision
18/09/2025	0800/1000	**	EU	EZ Current Account
18/09/2025	0800/1000		EU	ECB de Guindos at MNI Connect Event
18/09/2025	0900/1100	**	EU	EZ Construction Output
18/09/2025	0945/1145		EU	ECB Schnabel Chairs Panel at ECB Research Conference
18/09/2025	1100/1200	***	GB	Bank Of England Interest Rate
18/09/2025	1100/1200	***	GB	Bank Of England Interest Rate
18/09/2025	1230/0830	***	US	Jobless Claims
18/09/2025	1230/0830	**	US	WASDE Weekly Import/Export
18/09/2025	1230/0830	**	US	Philadelphia Fed Manufacturing Index
18/09/2025	1430/1030	**	US	Natural Gas Stocks
18/09/2025	1700/1300	**	US	US Treasury Auction Result for TIPS 10 Year Note
18/09/2025	1915/1515		CA	BOC speech on payments ecosystem from director Ron Morrow.
18/09/2025	2000/1600	**	US	TICS
19/09/2025	2301/0001	**	GB	Gfk Monthly Consumer Confidence
19/09/2025	2330/0830	***	JP	CPI
19/09/2025	0200/1100	***	JP	BOJ Policy Rate Announcement
19/09/2025	0600/0700	***	GB	Public Sector Finances
19/09/2025	0600/0700	***	GB	Retail Sales
19/09/2025	0600/0800	**	DE	PPI
19/09/2025	0645/0845	**	FR	Manufacturing Sentiment
19/09/2025	1005/1205		EU	ECB Lagarde and Cipollone at Eurogroup ECOFIN Meeting
19/09/2025	1230/0830	**	CA	Retail Trade