AUS
NZ
UK
CA
USA
IND
Highlights:
- US inflation data: Expected to show easing, reinforcing the case for further Federal Reserve rate cuts.
- UK GDP performance: August data likely to reflect steady growth, though slightly slower than previous months.
- Additional economic indicators: UK housing prices and retail sales figures will provide further insight into market conditions.
Next week’s macroeconomic calendar is set to be dominated by key data from both sides of the Atlantic, with the spotlight on US inflation figures and UK gross domestic product (GDP) performance. Investors and analysts alike will be closely monitoring these updates as they assess the potential for further rate adjustments and the health of the global economy.
US Inflation in Focus: A Key Driver for Rate Expectations
The United States will release its consumer and producer price index readings for September on Thursday. These inflation metrics are critical as markets continue to evaluate the Federal Reserve's trajectory on interest rates. Economists expect consumer price inflation to have cooled to 2.3%, down from 2.5% in August. Meanwhile, core inflation—excluding volatile items such as food and energy—is forecast to dip slightly from 3.2% to 3.1%.
If the data aligns with forecasts, it would bolster the argument for another base rate cut in November, following the Federal Reserve's recent decision to reduce rates by 50 basis points in September. According to analysts from IG Group, markets are pricing in an additional 34 basis point cut at the Fed’s next meeting, with total rate reductions reaching as much as 70 basis points by year-end.
UK GDP to Show Economic Resilience
Attention in the UK will turn to Friday’s GDP data for August. The British economy has demonstrated signs of resilience, with growth figures rising 0.7% in June and 1.2% in July. However, expectations for August’s reading suggest a more modest uptick of 1.1%. Should the figure fall below this threshold, it would mark the second consecutive month of slower-than-expected growth, but the general trajectory would still indicate that the UK is recovering from last year’s mild recession.
Beyond GDP, UK house price data is also anticipated next week, with the Royal Institute of Chartered Surveyors (RICS) and Halifax set to release figures that could provide insights into the health of the housing market. Retail sales data will be another focal point, offering clues into consumer confidence and spending habits in the face of inflation and rising interest rates.
Market Sentiment
The upcoming economic data will likely shape market sentiment and influence investor positioning in the coming weeks. With inflation cooling in the US, the likelihood of further rate cuts grows, while the UK’s continued economic expansion offers a glimmer of optimism amidst ongoing global challenges.
