• Monday: PBoC LPR.
  • Wednesday: NZ Retail Sales, AU/JP/EZ/GB/US PMIs, Canada Retail Sales.
  • Thursday: US Jobless Claims.
  • Friday: Fed Chair Powell speaks at the Jackson Hole Symposium (24-26 August).


The PBoC is expected to cut the LPR rates by 15 bps as it did the last week with the MLF. The rate cuts follow the promise of Chinese authorities to deliver more on the stimulus side to propel its ailing economy. The markets didn’t react positively to rate cuts as they probably want to see a stronger action.



New Zealand Retails Sales Q/Q is expected at -2.6% vs. -1.4% prior, while Core Retail Sales Q/Q is seen at -2.5% vs. -1.1% prior. Unless we see huge surprises, this data point is likely to be disregarded by the RBNZ as it made clear that they are comfortable with the current level of interest rate, and they are “ready to work through noisy data in the near term”.

New Zealand Retail Sales YoY
New Zealand Retail Sales YoY

We will also see the Preliminary PMIs for many advanced economies that are likely to lead the sentiment for the rest of the day:

  • Australia Manufacturing PMI 49.6 expected vs. 49.6 prior.
  • Australia Services PMI 47.9 expected vs. 47.9 prior.
  • Japan Manufacturing PMI 49.5 expected vs. 49.6 prior.
  • Japan Services PMI no forecast vs. 53.8 prior.
  • France Manufacturing PMI 45.2 expected vs. 45.1 prior.
  • France Services PMI 47.3 expected vs. 47.1 prior.
  • Germany Manufacturing PMI 38.6 expected vs. 38.8 prior.
  • Germany Services PMI 51.5 expected vs. 52.3 prior.
  • Eurozone Manufacturing PMI 42.4 expected vs. 42.7 prior.
  • Eurozone Services PMI 50.4 expected vs. 50.9 prior.
  • UK Manufacturing PMI 45.0 expected vs. 45.3 prior.
  • UK Services PMI 50.8 expected vs. 51.5 prior.
  • US Manufacturing PMI 49.4 expected vs. 49.0 prior.
  • US Services PMI 52.3 expected vs. 52.3 prior.

The Canadian Retail Sales M/M is expected at 0.0% vs. 0.2% prior, while the Core Retail Sales M/M is seen at 0.3% vs. 0.0% prior. Although another BoC rate hike in September is seen as a close call, the recent surge in wage growth and higher than expected core inflation data might be enough for them to proceed with another hike.

Canada Retail Sales YoY
Canada Retail Sales YoY


Every Thursday is important because of one key data point: the US Jobless Claims. The Fed and the Market are particularly focused on the labour market data due to the fear that continued tightness might lead to a wage price spiral (as it’s likely happening in the UK) and it will be harder to bring inflation back to target sustainably. Initial Claims are expected at 244K vs. 239K prior, while Continuing Claims are seen at 1700K vs. 1716K.

US Initial Claims
US Initial Claims


Fed Chair Powell is scheduled to speak at the Jackson Hole Symposium at 14:05 GMT. Given that the Fed will have another month of key data points before the next meeting, it’s unlikely to see Powell deviate from the recent comments and he should reaffirm once again their data dependency and keep all the options on the table. Some say that Powell is likely to be dovish because of the recent selloff in the stock and bond markets, but he’s been trying for a year to see higher yields and lower equity prices and now that the market might be finally doing the job for them, it would be a bad strategy to say something.

Fed Chair Powell
Fed Chair Powell