High Impact News: 16th - 20th September

High Impact News: Key Events to Watch in the Week Ahead

As we dive into another eventful week, the markets are bracing for key economic data and central bank decisions that could trigger significant price movements across multiple assets. From inflation reports to interest rate decisions, here’s a deeper look at the high-impact events shaping the week ahead.

Tuesday, September 17 kicks off with inflation data from Canada, where the Consumer Price Index (CPI) for August will be released. Analysts are watching for a YoY increase of 2.5%, alongside core inflation data at 1.7%. These numbers will provide insight into whether the Bank of Canada (BoC) may continue its hawkish stance or signal a slowdown in rate hikes. Later that day, we shift focus to the U.S. Retail Sales figures for August. Consumer spending has been a key driver of U.S. economic resilience recently, with the consensus pointing to a 1% month-on-month increase. The Retail Sales Control Group will also be closely scrutinized, as this core number excludes volatile items like autos and gas, giving a clearer picture of underlying demand.

Wednesday, September 18 starts with UK inflation data early in the morning. The Consumer Price Index (CPI) for August is forecast to rise 2.2% YoY, with core inflation set at 3.3%. With inflation still above target, the Bank of England’s task remains tricky, and this data will help shape the market’s outlook on future rate decisions. The main event, however, will be the Federal Reserve’s interest rate decision later in the day. While the Fed is expected to hold rates steady at 5.5%, analysts will pay close attention to the FOMC’s economic projections, especially around growth, inflation, and the future rate trajectory. The Fed Chair Jerome Powell’s press conference will be the key driver of market sentiment, with any hints of dovishness likely to weaken the U.S. dollar as investors start pricing in future rate cuts.

On Thursday, September 19, the spotlight moves to the Bank of England (BoE), with its much-anticipated interest rate decision. Although rates are expected to remain at 5%, the voting breakdown among the Monetary Policy Committee (MPC) members will be pivotal. With inflation still running high, any signs of dovishness or hawkish dissent will shape expectations for future hikes. UK Retail Sales data for August will also be released the following day, with markets anticipating a modest increase of 0.5% month-on-month. Stronger-than-expected sales could bolster the BoE’s case for maintaining its tightening stance.

Friday, September 20 will bring the Bank of Japan’s (BoJ) interest rate decision into focus. Since the BoJ raised rates to 0.1% back in March (and then 0.25% in July), marking a significant shift from its long-standing negative rate policy, markets will be keen to see if the central bank hints at further tightening. While no immediate rate hike is expected, rising inflation in Japan has increased pressure on the BoJ to gradually move away from its ultra-loose monetary policy. The BoJ press conference will be crucial for any updates on its approach to inflation and potential policy shifts in the coming months. Any unexpected hawkishness could lead to significant movements in the yen and Japanese equities.

This adjustment in the BoJ’s stance continues to represent a delicate balancing act, as the central bank grapples with rising inflation while still supporting economic recovery. Keep an eye on this decision as it could signal further shifts in Japan’s monetary policy approach.

With central banks across the globe walking a fine line between taming inflation and avoiding economic slowdown, this week promises a clear insight into the thoughts of the decision makers from each central bank. From the Fed’s rate decision to the BoE’s inflation challenges and the BoJ’s policy stance, there’s a lot on the horizon that could reshape markets. Stay tuned and be ready for potential trading opportunities as these events unfold!