Monday starts quietly, with no major economic events scheduled for the FX market.
On Tuesday, Australia will release the Westpac consumer sentiment and NAB business confidence surveys. SNB Chairman Schlegel is also scheduled to speak at the Bank for International Settlements Innovation Summit in Basel, in a fireside chat titled “Future-proofing central banks.”
On Wednesday, the focus will shift to the U.S. with the release of PPI m/m. Thursday brings the ECB monetary policy announcement for the eurozone, while in the U.S. attention will be on inflation data and weekly unemployment claims.
Finally, on Friday, the U.K. will publish GDP m/m, while in the U.S. markets will watch the prelim University of Michigan consumer sentiment and inflation expectations.
Last month, Australia’s Westpac consumer sentiment index rose 5.7% to 98.5, likely reflecting a positive response to the RBA’s third rate cut.
The September survey could mark the first net-positive reading in more than three years, supported by stronger Q2 GDP and signs of a housing market recovery. This indicates that monetary easing is beginning to lift activity.
At this week’s meeting, the ECB is widely expected to leave rates unchanged at 2.00%.
Eurozone growth remains weak, with Q2 GDP expanding just 0.1% q/q, driven mainly by inventories and consumption, while business investment declined. The near-term outlook is not encouraging, as PMIs continue to signal soft momentum. Inflation is still rising, but easing wage growth suggests underlying price pressures are moderating.
Markets will focus on updated projections and any signals about future policy moves. For now, the ECB is expected to remain on hold, with analysts anticipating one 25 bps rate cut in December, given current conditions.
In the U.S., the consensus for core CPI m/m is 0.3% vs prior 0.3%; for CPI m/m is 0.3% vs prior 0.2%; and for CPI y/y is 2.9% vs 2.7%.
Tariffs are adding to goods inflation, and with inventories running down and imports rebounding, U.S. firms face higher customs costs that could keep goods prices under pressure in the months ahead, according to Wells Fargo analysts. Even so, the spillover to services appears limited, as softer labor conditions are holding down wage growth.
Thursday’s CPI will be the final major release before the Fed’s September 17 meeting. While another firm print is likely, falling rents, weaker energy prices, and easing wage pressures suggest inflation is cooling compared to 2022 highs. A 0.3% monthly gain in both core and headline CPI is unlikely to prevent the Fed from delivering a 25 bps cut, given slowing activity and a weakening labor market.
In the U.K., the consensus for GDP m/m is 0.0% vs prior 0.4%. After June’s 0.4% gain, growth is expected to stall. Consumption remains uneven, with recent retail sales showing downward revisions despite a solid July print. Services continue to support growth but are also keeping inflation elevated, with services prices still running at 5%.
From a monetary policy perspective, even a weak GDP print this week is unlikely to alter the BoE’s stance for this month’s meeting. The Bank is still expected to deliver a 25 bps rate cut in November.
The University of Michigan consumer sentiment survey will be closely watched, with confidence already at low levels as households grapple with tariff-driven price pressures and growing job insecurity. At the same time, the government’s fiscal backdrop remains fragile, with another sizable borrowing figure expected. This highlights how tariff revenues continue to fall short of President Trump’s claims that they would strengthen public finances, ING analysts said.
