Lowest Spreads and Flexible Terms.
Fed will decide on interest rates. What about the dollar and the zloty exchange rate?
Markets are waiting for the Fed, with decisions in Europe and Japan still ahead
Next week in financial markets will be dominated by central bank decisions and a string of macroeconomic data releases. The biggest attention will go to the Fed statement, as the market is fairly strongly pricing in an interest rate hike. That is not yet a done deal, though.
Also in focus will be the central banks in the Czech Republic, the United Kingdom and Japan. For the Polish market, Poland’s credit rating will also matter, as it could affect sentiment toward the złoty.
On Monday, 14 September, at 6:30 Polish time, final data on Japanese industrial production will be released. At 8:30, India will publish its WPI wholesale price index, and at 9:00 BIEC will release its September future inflation index. At 12:30, India’s August CPI (Consumer Price Index) will be published, and at 14:00 the market will get Poland’s July balance of payments, a key measure for the złoty, showing the country’s inflows and outflows with the rest of the world.
Later that day, at 14:30, Canada will release its August CPI. The calendar also includes speeches by two members of the ECB Executive Board, Piero Cipollone and Isabel Schnabel. Half-year results will also be reported by, among others, Odlewnie, Talex and Xplus.
On Tuesday, 15 September, a batch of August data from China will be released in the early hours, including property prices, urban-area investment, retail sales and industrial production. At 8:00, the United Kingdom will publish data on annual average weekly earnings growth for July and the unemployment rate for August. At 9:30, Statistics Poland (GUS) will release a detailed report on August consumer inflation in Poland, and at 11:00 Eurostat will publish the euro area’s July trade balance.
Wednesday, 16 September, will begin with data from the United Kingdom, where August PPI and CPI will be released at 8:00. Overnight, at 1:50 Polish time, Japan will publish August foreign trade figures and July machinery orders. At 10:00, Italy will release the final August CPI, and an hour later data on industrial production in EU countries for July will be published.
At 14:00, the NBP (Narodowy Bank Polski — National Bank of Poland) will present its estimate of August core inflation. Economists expect it to rise to 3,2% from 3,1% in July. Half an hour later, the US will publish August retail sales and data on import and export prices. At 16:00, information on US unsold inventories and the September NAHB housing market index will be released, and at 16:30 data on fuel and crude oil inventories will follow.
The main event of the day, however, will be the September statement from the Federal Open Market Committee. The committee is divided, and some members are in favor of raising rates. The futures market is pricing the odds of a 25-basis-point hike at nearly 70%, but the decision is not yet settled. Along with the statement, new macroeconomic forecasts and the so-called dot plot are due, showing the expected path for the federal funds rate. At 20:30, Fed Chair Kevin Warsh will speak.
Thursday, 17 September, will bring Poland’s September consumer confidence reading from GUS, including the inflation expectations indicator. At 11:00, Eurostat will publish the final HICP inflation reading in the European Union. At 13:00, the Bank of England will decide on interest rates, and an hour and a half later a rate hike in the Czech Republic is possible. At 14:30, the US will release the Philadelphia Fed index, housing data and the weekly number of jobless claims.
Friday, 18 September, will start with an expected rate hike in Japan. Economists expect the BoJ to raise its policy rate by 25 bp. As early as 1:30 AM, Japan will release August CPI, which is expected to move close to 2% or even exceed that level. At 8:00, Germany will publish August PPI, and the United Kingdom will release retail sales data. At 9:30, GUS will publish data on Poland’s industrial production for August, and at 15:15 the latest figures on US industry will be released. The day will end with the August US leading economic indicators index from the Conference Board, after which the market will also look at the review of Poland’s rating by Moody’s.
Analysts say agencies may not downgrade the rating until after next year’s parliamentary elections, despite the very poor state of Poland’s public finances. Half-year results will also be published by, among others, Amica, Gaming Factory, Newag, Quantum and Spyrosoft.
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