Events to Look Out for Next Week

• RBA’s Debelle, BoE’s Governor Bailey and Fed Chair’s Powell speech

Wednesday – 23 September 2020

• Interest Rate Decision & Policy Report (NZD, GMT 02:00) – The Reserve Bank of New Zealand (RBNZ) is widely expected to keep the OCR (Official Cash Rate) at the current record low 0.25%. RBNZ Governor Orr, speaking in the first week of September, stressed again that the central bank is actively preparing a new package of measures to implement if necessary. That could include negative wholesale interest rates, further quantitative easing and direct lending to banks. The RBNZ is in the low-for-longer whatever-it-takes boat with the bulk of the world’s central banks.
• Markit Services and Composite PMIs (EUR, GMT 07:30-08:00) – The prelim. EU Markit PMI Indices are expected to continue above 50, but slightly decline on Services, which could result in a composite PMI for September at 51.6 from 51.7.
• Markit Services and Composite PMIs (GMT, GMT 08:30) – The prelim. UK Markit Service PMI Indices is expected to have improved in September to 59.5.  The ongoing recovery in the service sector could continue to be the dominant upward driver of the composite figure. The government’s ‘Eat Out to Help Out’ scheme is behind the so far  strength in activity.
• Markit Services and Composite PMIs (USD, GMT 13:45) – The prelim. US Markit Service PMI  for September is seen lower at 54.9, after the 55.0 in the final read for August. In August the composite index dipped to 54.6 in the final version versus the 54.7 preliminary, though it’s up from July’s 50.3.
• Monetary Policy Meeting Minutes (JPY, GMT 23:50) – The BOJ minutes, similar to the ECB Reports, provide a detailed assessment of the bank’s most recent policy-setting meeting, containing in-depth insights into the economic conditions that influenced the rate decision. They are usually a cause for FX turbulence.

Thursday – 24 September 2020

• Interest Rate Decision & Policy Report (CHF, GMT 07:30)  – The influence of the SNB’s intervening hand may have been in play this month. Total Swiss sight deposits of Francs have risen by 130 bln since the pandemic and consequential lockdowns took a grip on global markets back in March. Sight deposits can be viewed as a proxy marker of SNB intervention to sell Francs in forex markets (after buying foreign currencies), which results in the crediting of newly created Francs in commercial banks sight accounts. The rise in sight deposits also reflects SNB operations to boost liquidity via the COVID-19 refinancing facility. The advent of the EU’s recovery fund (a new liquid AAA fund that also reduces Eurozone breakup risks), seen as a milestone by many analysts,  has by many accounts caused a re-weighting of the common currency in portfolios, which will help the SNB combat what it sees as a chronically overvalued Franc. The SNB would like to step out of the negative interest rate policy sooner rather than later, but with the world economy still in the grip of Covid-19 and data releases highlighting the fallout from the crisis, there is little the central bank can do if it wants to keep the currency under control.
• German IFO (EUR, GMT 08:00) – German IFO business confidence is expected to rise to 94 from 92.6 in August.
• Jobless Claims (USD, GMT 12:30)– US initial jobless claims fell -33k to 860k in the week ended September 12 after a revised 893k print in the September 5 week. This is the fourth reading with claims below 1 mln since the surge in the March 20 week.
• BoE’s Governor Bailey speech (GBP, GMT 14:00)

Friday – 25 September 2020

• Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to rise 2.0% in August with a 3.1% climb in transportation orders, after an 11.4% headline orders climb in July that included a 35.7% transportation orders surge. The durable orders rise ex-transportation is pegged at 1.5%. Defense orders are pegged at 0.9%, following a 33.4% July pop. Boeing orders rose to 8 planes from zero orders in July. The vehicle assembly rate should improve to 12.1 mln from 11.9 mln units in July, versus a 0.1 mln trough in April. Durable shipments should rise 2.5%, and inventories should fall -0.6%.