All eyes on G20 meetings
Following on from the weekend, China are hosting the G20 meetings, attended by finance ministers and central bankers from 20 industrialised nations. This includes the G7 nations – Canada, Italy, France, Germany, Japan, the UK and the US. The meetings are closed to the press but officials usually talk with reporters throughout the day and a formal statement is released after the meetings in Hangzhou have concluded. President Xi Jinping will be hoping to cement China’s standing as a global power, but he suspects there will be disagreements with the West and its allies over various issues, including territorial disputes and protectionism.
A little closer to home, the monthly UK services PMI figure will be released at 9:30am and is expected to reach 49.1, which beats last month’s figure despite still being in contraction. Since services make up approximately 75% of the UK’s GDP, this figure could cause some volatility in the markets if it misses expectations.
In the early hours of the morning, the Reserve Bank of Australia will release their interest rate figure. This is expected to be consistent with last month’s 1.5% reading, which was down from July’s 1.75%. A statement will follow on from this and will contain commentary about the economic conditions that influenced their decision. At 3:00pm, US ISM Non-Manufacturing PMI is released, with an anticipated number of 55.4, down from last month’s 55.5 reading. This shows that the markets are expecting industry expansion to continue. At 5:15pm, the Swiss National Bank’s Governing Board Chairman, Thomas Jordan, will be delivering remarks at the Faculty of Economics in Lucerne. The head of the central bank’s comments will be scrutinized, as he may give an indication on their future monetary policy.
At 2:30am Australia’s GDP will be released, with a forecast figure of 0.4%. This quarterly figure is the broadest measure of economic activity, demonstrating the inflation-adjusted value of all goods and services produced by the economy. Last quarter’s reading of 1.1% beat the expectations of 0.6%. If this were to happen again, one would expect the Australian Dollar to gain in strength.
At 9:30am the UK’s monthly Manufacturing Production figure will be released, this is expected to register at -0.4%. If this target is not met, the Pound is likely to suffer since Manufacturing makes up around 80% of total Industrial Production. Following this, Mark Carney and several MPC members will testify on inflation and the economic outlook at 2:15pm. The Governor of the BoE’s comments are likely to cause market volatility. At 3:00pm the Bank of Canada will also release an official overnight interest rate with a statement to follow.
In the early hours of the morning we are expecting to see Trade Balance figures from Australia and China, demonstrating the difference in value between imported and exported goods and services for August. The anticipated numbers are -2.65 billion and 372 billion respectively. At 12:45pm, the European Central Bank will post their Minimum Bid Rate. This has remained unchanged since March, and is expected to continue at 0.00%. A press conference will follow 45 minutes later and will be analysed for any clues regarding future monetary policy. Unemployment Claims and Crude Oil Inventories from the US finish off the afternoon’s session.
Friday will be fairly light on top tier figures. CPI and PPI data will be released from China at 2:30am. This is forecast at 1.7% and -1.0% respectively and at 1:30pm Canada will post their Employment Change and Unemployment Rate data. Throughout the day, Eurogroup meetings will be held in Brussels. Ministers are expected to discuss the progress made in Greece in achieving the milestones agreed in its financial assistance program. Their accomplishment will open the way for the disbursement of further financial assistance. At 12:45pm, FOMC Member Rosengren, is due to speak about economic forecasts at the South Shore Chamber breakfast in Boston.