In the European session, we don't have much on the agenda other than the Swiss CPI and the final PMI data for the major Eurozone economies and the UK. None of the data is going to change anything for the respective central banks, so the reaction will likely be muted.
The Swiss CPI Y/Y is expected at +0.3% vs +0.2% prior. The SNB has ended its easing cycle by returning to ZIRP (zero interest rate policy) in June. Since then, the central bank has been repeating that the bar for negative rates is high, so unless we get another clear negative shock in the global economy, the SNB is expected to remain on the sidelines for a long time.
In the American session, the main highlight is going to be the US ISM Manufacturing PMI which is expected to tick higher to 49.5 vs 49.1 prior. The latest S&P Global US PMIs showed an acceleration in business activity to the "second-fastest" so far this year. The agency added that "while employment growth picked up, the pace of job creation remained only modest, and weakened especially in manufacturing."
"Jobs growth was also limited by a worsening of business confidence, principally reflecting ongoing concerns over the impact of government policies such as tariffs."
Sentiment was supported, however, by lower interest rates. Prices charged for goods and services rose at the slowest rate since April, but firms’ costs continued to increase sharply, attributed to the impact of tariffs alongside upward wage pressures."
The worsening in business confidence is mainly because of tariff policies, therefore it should improve considerably in the next months after the US-China de-escalation. The pickup in jobs growth was also signalled by the latest weekly ADP data. We will get the monthly ADP report on Wednesday, which is going to be another key release this week.
Central bank speakers:
- 08:50 GMT/03:50 ET - ECB's Simkus (dovish - voter)
- 12:00 GMT/07:00 ET - ECB's Lane (neutral - voter)
- 12:30 GMT/07:30 ET - ECB's Escriva (neutral - voter)
- 13:30 GMT/08:30 ET - ECB's Kocher (neutral - voter)
- 17:00 GMT/12:00 ET - Fed's Daly (dovish - non voter)
- 18:30 GMT/13:30 ET - BoC Governor Macklem (neutral - voter)
- 19:00 GMT/14:00 ET - Fed's Cook (dovish - voter)
