Week Ahead - Action Packed End To Summer

Craig Erlam profile picture
Craig Erlam


  • Now that Jackson Hole is over, the focus shifts back onto the economic recovery.
  • The euro area economy is ticking along nicely.
  • Data from the UK this week showed that, despite all restrictions being lifted, the economy continues to face headwinds because of supply and labour shortages.

End of the World Street in Chile - Patagonia
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Now that Jackson Hole is over, the focus shifts back onto the economic recovery. Investors will pay close attention to every data point that can give possible insights into the labour market recovery and if pricing pressures continue to heat up.

A quicker trajectory towards substantial progress in the labour market could trigger a quicker tapering of asset purchases. The August nonfarm payroll report is expected to deliver a robust 787,000 jobs, which would be less than the prior month’s 943,000 reading, but still complementing the path towards formally announcing tapering.

Inflationistas will keep a close eye on Wednesday’s ISM report, which could show input costs remain at elevated levels, while inventories continue to contract. The ISM Manufacturing headline is expected to soften from 59.5 to 58.7.


The euro area economy is ticking along nicely. Common challenges remain, notably delta and supply issues, but many countries in the bloc are now among those with the highest vaccine rollouts which positions them well going into the final months of the year.

Next week offers a broad selection of data, most notably flash CPI and unemployment. Final manufacturing and services PMIs will also be released. The ECB minutes this week confirmed the divide in the ECB that we all knew was there but didn’t offer much on what it means going forward on asset purchases, most notably PEPP which is due to run until the end of March next year.


Data from the UK this week showed that, despite all restrictions being lifted, the economy continues to face headwinds because of supply and labour shortages. There has been rising Covid cases in the UK but hospitalisations and fatalities remain very low by past standards.

Next week consists of tier two and three data, notably the final manufacturing services PMIs.

Emerging Markets


Next week sees the release of unemployment and PMIs for manufacturing and services.

The central bank previously raised rates to 6.5% and warned that more may follow.

South Africa

A mixed week that saw unemployment surprisingly rise to 34.4% from 32.6% in Q2. The data could deteriorate further in the third quarter as a result of new Covid restrictions.

On a more positive note, the economy is 11% bigger than previously estimated following a change in the way it’s calculated. That means the deficit and debt as a share of GDP will be lower, with the latter now expected to remain below 80% over the next few years when it was previously projected to reach 87.3% in 2024.

Next week offers a few tier-three releases.


Plenty of data released next week including Q2 GDP on Wednesday, which is expected to show the country grew more than 21% compared to a year ago when the country faced severe restrictions.

Inflation data on Friday will attract a lot of attention given the pressure on the CBRT Governor not to raise interest rates. Forecasts are for it to fall slightly to 18.7%, in line with the central bank’s thoughts.

If we see a surprise rise above the central bank rate, it could be extremely problematic for Governor Şahap Kavcıoğlu. Does he stand by his word and prioritise retaining confidence in the markets at the expense of risking the sack, or go back on it and risk the wrath of the markets.

Asia Pacific


China has announced that the latest outbreak of the Covid Delta variation has been completely contained, saying that Covid cases had been brought down to zero. The impact of the outbreak on China’s economy should be most evident in the next Non-Manufacturing PMI. The manufacturing sector is expected to see only limited damage, as external demand remains robust.

Manufacturing and Services PMIs for August will be released early next week. Manufacturing activity is expected to be stagnant, with a consensus of 50.2 for both the Manufacturing PMI and Caixin Manufacturing PMI. The Services sector is forecast to show slight expansion, with estimates of 52.0 for the Non-Manufacturing PMI and 51.3 for the Caixin Services PMI.

The China Securities Journal reports that the PBoC plans to soon boost the credit supply and increase the amount of money that supports small businesses and the real economy. The move follows a decrease in credit and economic growth in July.


India has seen a surge in Covid cases, which is being attributed to a harvest celebration in southern India. On Thursday, India recorded 46 thousand cases, the highest daily count in over a month. Only 10% of India’s population has been fully vaccinated against Covid, which means that the number of new cases of the Covid Delta variation could skyrocket. India’s GDP for Q2 (YoY) is expected at 20.9%.

Australia & New Zealand

The government has imposed strict lockdowns, but Covid cases continue to surge. On Thursday, Australia reported over 1,000 new cases, the highest total since the pandemic began in 2020. There are growing concerns that the economy could fall into a recession if Covid numbers continue to rise.

Australia’s economy showed solid expansion in the first quarter, with a gain of 1.8% (QoQ). However, there are concerns that growth may have slowed to below 1% in Q2. Australia will release GDP for Q2 on Tuesday.

The recent outbreak of the Covid Delta variant has led to a lockdown of the entire country. The government has announced that the lockdown will be eased in all areas except in Auckland. ANZ Business Confidence, which came in at -3.8 in July, will be released on Monday.


Japan continues to struggle with an upsurge in Covid cases, and the state of emergencies will hamper economic growth. Early next week, Japan releases the unemployment rate and Industrial Production for July. Both indicators are expected to have worsened compared to June.

Key Economic Events

Sunday, Aug. 29

– Debate amongst candidates vying to become Germany’s next chancellor

Monday, Aug. 30

– President Biden meets Ukrainian President Volodymyr Zelenskiy at the White House

Economic Data/Events

US pending home sales

Eurozone economic/consumer confidence

Germany CPI

Japan Retail sales

South Africa monthly budget balance

Tuesday, Aug. 31

– Today is the tentative deadline for the US evacuation in Afghanistan

– ECB Governing Council members Robert Holzmann and Klaas Knot, Denmark central bank Deputy Governor Per Callesen and Croatia central bank Governor Boris Vujcic speak at a conference in Alpbach, Austria.

– IMF’s Jonathan Ostry delivers South Africa’s Mapungubwe Institute for Strategic Reflection annual lecture, on the theme of “Will Covid-19 Raise Inequality? Evidence from Past Pandemics and Crises.”

– The Center for Strategic & International Studies holds an event, “A Mission to Mars: A Conversation with Her Excellency Sarah Al Amiri, UAE Minister of State for Advanced Technology.”

Economic Data/Events

US FHFA house price index, Chicago PMI, Conference Board consumer confidence

Canada GDP

Czech Republic GDP

Finland GDP, CPI

France GDP

India GDP

Italy GDP, CPI

Denmark GDP

Poland GDP, CPI

Germany Unemployment

Russia Unemployment

Eurozone CPI

Thailand trade, BoP

Australia BoP current account balance, building approvals

Hong Kong retail sales, money supply, budget balance

Singapore bank loans, money supply

New Zealand building permits, ANZ business confidence

Japan industrial production, housing starts, Unemployment

Mexico central bank quarterly inflation report

UK mortgage approvals, money supply

South Africa trade balance, money supply

Wednesday, Sept. 1

– BOJ Deputy Governor Wakatabe speaks in Hiroshima.

– ECB Governing Council members Holzman and Knot, and Bundesbank President Weidmann speak at a Bundesbank symposium.

– Mexican President Andres Manuel Lopez Obrador delivers third state-of-the-union address.

Economic Data/Events

US Aug ISM manufacturing: 58.7e v 59.5 prior, ADP employment change: 650Ke v 330K prior, Markit Manufacturing PMI, construction spending

OPEC+ meeting on output

Hungary GDP

Turkey GDP

Australia GDP

Eurozone Unemployment

Eurozone Manufacturing PMIs (Germany France, Italy Spain)

India Manufacturing PMI

UK Manufacturing PMI

Australia Manufacturing PMI

Thailand Manufacturing PMI

South Africa Manufacturing PMI

Hungary Manufacturing PMI

China Caixin manufacturing PMI

Japan capital spending, vehicle sales, manufacturing PMI

Australia commodity index

Thailand business sentiment index

EIA Crude Oil Inventory Report

Thursday, Sept. 2

– Eastern Economic Forum held in Vladivostok.

– BOJ board member Kataoka gives a speech online to business leaders in Nagasaki, Japan.

Economic Data/Events

US factory orders, durable goods, trade balance, initial jobless claims

Australia trade balance

Japan monetary base

Singapore PMI, electronics sector

New Zealand terms of trade index

Canada building permits

Eurozone PPI

Spain unemployment change

Switzerland GDP, CPI

Friday, Sept. 3

– The European House-Ambrosetti annual forum takes place in Cernobbio, Italy

Economic Data/Events

US Aug Change in nonfarm payrolls: 787Ke v 943K prior; Unemployment Rate: 5.2%e v 5.4% prior

Eurozone retail sales, Markit services PMI

UK Services PMI

Australia Services PMI

India Services PMI

Singapore Markit PMI

China Caixin services PMI

Japan Bank services PMI

Thailand foreign reserves, forward contracts

Singapore retail sales

South Africa PMI

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

This article was written by

Craig Erlam profile picture
Based in London, England, Craig Erlam joined OANDA in 2015 as a Senior Market Analyst. With more than five years’ experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
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