This week’s financial market focus shifts to major central banks, with pivotal announcements expected from the Federal Reserve, Bank of England, and Bank of Japan. While the Federal Reserve is anticipated to implement its first rate cut since 2020, the extent of the reduction remains uncertain. Investors are also closely watching the Bank of England and Bank of Japan, with both expected to keep rates on hold. Alongside these decisions, key data releases, including U.S. inflation and UK retail sales, will further influence market sentiment, setting the stage for potential market volatility.

Last Week:

1. US August Employment Situation Report
   • Non-farm payroll growth: 142,000 jobs (below expectation of 160,000).
   • Unemployment rate: 4.2% (down from 4.3% in June).
   • Average hourly earnings grew between July and August.
2. US August CPI inflation report.
   • Headline inflation lower than expected, core inflation remained sticky.
   • Triggered a hawkish rate repricing in markets.

Monday, 16 September:

• Minimal market events.
• Empire State Manufacturing Index scheduled for the US session.
• Japan and China on bank holidays, resulting in low liquidity.

Tuesday, 17 September:

• Key events:
  • Germany ZEW Economic Sentiment data.
  • Canadian CPI and US Retail Sales data in the New York session.

Wednesday, 18 September:

• Major focus on:
  • UK CPI release.
  • US Building Permits data.
  • US Crude Oil inventories.
  • Fed’s rate announcement: Anticipated rate cut, decision between 25 and 50 basis points.

Thursday, 19 September:

• Key events:
  • New Zealand GDP and Australian employment data in the Asian session.
  • Bank of England rate decision expected.
  • US data: Unemployment claims, Philly Fed Manufacturing Index, Existing Home Sales data.

Friday, 20 September:

• Key rate decisions from:
  • Bank of Japan and People’s Bank of China in the Asian session.
• UK Retail Sales data.
• Canadian Retail Sales data and speech from Bank of Canada Governor Tiff Macklem.
• ECB President Christine Lagarde and FOMC’s Patrick Harker will speak.