Market outlook for the week of September 22nd-26th

This week’s market outlook is packed with key data releases and events that will impact various economies and currencies. Monday kicks off with remarks from FOMC members setting the tone for the week ahead. On Tuesday, the focus shifts to flash manufacturing and services PMIs across different regions, including Australia, the eurozone, the U.K., and the U.S. Fed Chair Powell’s speech on the economic outlook will be closely watched for any hints on future policy changes. Wednesday brings crucial inflation data from Australia and Japan, providing insights into the health of these economies. Thursday is marked by the SNB monetary policy announcement, along with a slew of U.S. economic indicators like final GDP, jobless claims, durable goods orders, and existing home sales numbers. Closing the week on Friday, Japan will report Tokyo core CPI, Canada will release GDP data, and the U.S. will unveil core PCE price index, personal income and spending figures, along with the revised University of Michigan consumer sentiment and inflation expectations. Throughout the week, FOMC members are expected to shed light on the economy’s risks and the Fed’s rate cut plans, adding to market volatility and sentiment. Traders will closely monitor eurozone PMI data to ascertain the true growth trajectory of the region, especially after strong August readings in manufacturing and services. However, underlying expectations suggest a more tempered rebound, hinting at persistent economic challenges. The Australian CPI is forecasted to rise, driven by increased prices in electricity, housing, and recreation sectors. Rising energy costs and housing prices have contributed to inflation, though some of these spikes are expected to normalize in the coming months. In the U.S., a sluggish housing market is evident in existing and new home sales data, reflecting subdued buyer demand amid high borrowing costs and labor market uncertainties. While mortgage rates have slightly eased, a quick market rebound remains uncertain due to economic headwinds. The manufacturing sector also faces challenges, with durable goods orders showing mixed results. Though certain industries like high-tech have seen growth, broader economic gains remain elusive. In Japan, core CPI figures will be closely monitored for signs of inflationary pressure and economic stability in the face of external challenges like U.S. tariffs. Meanwhile, the upcoming core PCE deflator release in the U.S. will provide insights into the Fed’s preferred inflation metric, along with personal income and spending data. Overall, this week’s market outlook is riding on a wave of crucial data points and events that will shape investor sentiment and currency movements across different regions.