Germany's January ZEW economic sentiment index is expected at -16.0, while final readings of December consumer price index is estimated to be up 8.6% on year.

Eurozone: first days of the year are going to be action-packed

ING Economics ING Economics 29.12.2022 14:02
The New Year starts off with some key data releases. In the eurozone, we expect inflation to drop below 10% due to base effects and declining oil prices. Turkish December inflation is expected to be at 2.9% month-on-month, leading annual CPI to decline even further. In Hungary, we expect a negative reading in November's retail sector performance Eurozone: Energy inflation is set to drop The eurozone starts off the year with some key data releases. Energy inflation is set to trend lower on the back of base effects and declining oil prices. That makes a small drop below 10% quite possible but beware of developments outside of energy. The Economic Sentiment Survey, meanwhile, will give some insight into price expectations from businesses. It will also give a sense of how businesses have fared through the final month of the fourth quarter when we expect a contraction. Turkey: Annual CPI expected to maintain its downward trend We expect December inflation to be at 2.9% MoM, leading to a further decline in the annual figure, to 67% from 84.4% a month ago. Easing global commodity prices and strength in the currency will likely be supportive factors in the monthly reading, and along with favourable base effects, this will contribute to annual CPI continuing its downward trend in the near term, depending on the continuation of currency stability. Read next: EUR/USD Pair Remains Within Its Horizontal Trading Range, The Aussie Failed To Break The Resistance At 0.68| FXMAG.COM Hungary: Negative reading in November retail sector performance In Hungary, the New Year starts with some strong labour market data. Strong wage growth might come from the one-off, mid-year wage adjustment, which is reflected in inflation readings. The unemployment rate will show some short-term stability heading into year-end. But the real deal will be the retail sector performance in November, where we expect a negative reading, showing the impact of negative real wage growth and the changing propensity to consume. Key events in developed markets next week Source: Refinitiv, ING Key events in EMEA next week Source: Refinitiv, ING Key events in Asia next week Source: Refinitiv, ING Read this article on THINK TagsTurkey Hungary Eurozone Emerging Markets EMEA Asia week ahead Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Orbex's Jing Ren talks macroeconomic events of the week 14/11-18/11

Orbex's Jing Ren talks macroeconomic events of the week 14/11-18/11

Jing Ren Jing Ren 14.11.2022 14:40
14 November 2022 Are we there yet? Falling inflation pops up risk assets GBPUSD awaits budget catalystThe pound edges higher as Britain may look to restore markets’ confidence with a new budget. Sterling has recouped losses from the September budget firesale. Traders are awaiting a new announcement while riding on the dollar’s softness. Heightened volatility could be expected this week as British finance minister Jeremy Hunt presents his plan to fill a £50 billion fiscal hole. After the market sanctioned Mr Kwarteng’s unfunded tax cuts, fiscal discipline with a mix of public spending cuts and tax rises would alleviate worries about Britain’s finances. 1.2300 is the next hurdle as the recovery goes on. 1.1150 is the closest support. USDJPY tumbles on lower inflationThe Japanese yen soared over the prospect of a narrowing interest differential with the US counterpart. Following months of parabolic ride, a weaker US CPI finally gave traders an excuse to exit an overcrowded trade. The market has been watching Japan's falling foreign reserves and pondering whether Tokyo would commit more of its war chest to prop up its currency. But now a greater fall than the one from Japanese authorities’ intervention indicates that prolonged weakness has released the reversal tension, making the yen the main beneficiary of the dollar’s retreat. 137.00 is the first support and 144.00 a fresh resistance. UKOIL struggles as China’s demand worriesOil markets cheered after China announced an easing of some of its COVID curbs. Brent crude has been going sideways over demand concerns. China’s zero-COVID policy and a resurgence in infections in major cities remain a thorny problem. Now that the manufacturing centre of Guangzhou has become ground zero, expectations of a slowdown in China’s activities and its appetite for the commodity put the buy side on the defensive. Meanwhile, global supply has kept up with US crude stocks surprisingly rising to a 16-month high. The supply demand imbalance may cap the price under 105.00. 84.00 is a key support to monitor. NAS 100 recovers on renewed Fed pivot hopesThe Nasdaq 100 bounced back as hopes of peaking inflation took a foothold. With US CPI coming in below 8% for the first time in eight months, investors have regained faith in a policy U-turn by the Fed sooner than later. Plunging Treasury yields suggests that the central bank could live with a 50bp rate hike in December, rather than a 75bp one. However, the bounce could be opportunistic as it might take multiple sets of data over the next few months to make the Fed change its mind. The pivot may only happen when there is a consistent deceleration in inflation. The index is heading towards 12800 with 10500 as a fresh support. Key data release (GMT time) Monday, 14 November BoE Monetary Policy Report Hearings 23:50 Gross Domestic Product Tuesday, 15 November 00:30 RBA Meeting Minutes 07:00 ILO Unemployment Rate 10:00 Gross Domestic Product       Wednesday, 16 November 07:00 Consumer Price Index 13:30 Retail Sales BoC Consumer Price Index Core Thursday, 17 November 00:30 Unemployment Rate
The Data May Keep The British Pound (GBP) From Rising

Australian trade balance, Bank's of England interest rate decision and more - Thursday, November 3rd commented by InstaForex

InstaForex Analysis InstaForex Analysis 30.10.2022 20:01
Thursday 03 November A public holiday in Japan. Japanese banks and exchanges will be closed, and trading volumes during the Asian trading session will be reduced. Australia. Trade balance This indicator evaluates the difference in the volume of exports and imports. The excess of exports over imports leads to a trade surplus, which has a positive impact on the national currency quotes. A decrease in the trade balance surplus may have a negative impact on the quotes of the national currency. Conversely, the growth of the trade surplus is a positive factor. Previous values (in billion Australian dollars): 8.324 (August), 8.733 (July), 17.670 (June), 15.016 (May), 13.248 (April), 9.738 (March), 7.437 (February), 11.786 (January). The level of influence on the markets is from low to medium. UK. Composite PMI and Services PMI (final release) The UK Composite PMI (from S&P Global) is an important indicator of the health of the UK economy. If the data turns out to be worse than the forecast and the previous value, then the pound is likely to fall sharply in the short term. Data better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is considered positive and strengthens the GBP, below 50 is considered negative for the GBP. Previous values: 49.1, 49.6, 52.1, 53.7, 53.1, 58.2, 60.9, 59.9, 54.2 (in January 2022). The preliminary score was 47.2. The level of influence on the markets (final release) is from low to medium. The PMI in the UK services sector (S&P Global) is an important indicator of the state of the British economy. The service sector employs the majority of the UK's working-age population and contributes approximately 75% of GDP. The most important part of the service industry is still financial services. If the data turns out to be worse than the forecast and the previous value, then the pound is likely to fall sharply in the short term. Data better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is considered positive and strengthens the GBP, below 50 is considered negative for the GBP. Previous values: 50.0, 50.9, 52.6, 54.3, 53.4, 58.9, 62.6, 60.5, 54.1 (in January 2022). The preliminary score was 47.5. The level of influence on the markets (final release) is from low to medium. UK. BoE interest rate decision. Minutes of the BoE meeting. The planned volume of asset purchases by the BoE. Monetary Policy Report The level of interest rates is the most important factor in assessing the value of a currency. Most other economic indicators are only looked at by investors to predict how rates will move in the future. It is possible that at this meeting the BoE will again raise the interest rate (up to 2.75% - 3.00%). However, despite the positive macro data coming out of the UK, the interest rate may remain at the same level of 2.25%, which could cause the pound to weaken. The minutes of the Monetary Policy Committee (MPC) of the BoE contain information on the distribution of votes "for" and "against" the increase/decrease in the interest rate. The report of the BoE on monetary policy, which will also be published at the same time, contains an assessment of the economic situation, the outlook for the economy and inflation. The soft tone of the report will help weaken the pound. Conversely, the tough rhetoric of the report regarding inflation, which implies a further increase in the interest rate, will cause the pound to strengthen. The level of influence on the markets is high. USA. Unemployment claims The US Department of Labor will publish a weekly report on the state of the US labor market with data on the number of primary and secondary claims for unemployment benefits. The state of the labor market (together with data on GDP and inflation) is a key indicator for the Fed in determining the parameters of its monetary policy. The result is higher than expected and the growth of the indicator indicates the weakness of the labor market, which negatively affects the US dollar. The drop in the indicator and its low value is a sign of the recovery of the labor market and may have a short-term positive impact on the USD. Initial and re-claims are expected to remain at pre-coronavirus lows, which is also positive for the dollar, indicating the stability of the US labor market. Previous (weekly) figures for initial jobless claims: 217,000, 222,000, 228,000, 237,000, 245,000, 252,000, 248,000, 254,000, 261,000, 244,000, 235,000, 231,000, 232,000, 202,000, 211,000 Previous (weekly) values for repeated claims for unemployment benefits: 1,438,000, 1,473,000, 1,437,000, 1,412,000, 1,434,000, 1,430,000, 1,420,000, 1,368,000, 1,384,000, 1,333,000, 1,372,000, 1,324,000, 1,331,000, 1,309,000, 1,309,000 The level of influence on the markets is medium to high. UK. Speech by BoE Governor Andrew Bailey As head of the central bank, Bailey has more influence on the British pound than any other person in the UK government. Market participants will closely follow the progress of his speech to better understand the prospects for the monetary policy of the BoE. Volatility during a speech by the head of the BoE usually rises sharply in the quotes of the pound and the FTSE London Stock Exchange index if it gives any hints of tightening or easing monetary policy of the BoE. If Bailey does not touch upon the topic of monetary policy, then the market reaction to his speech will be weak. The level of influence on the markets is from low to high. USA. Indices (from S&P Global) business activity (PMI): composite and in the service sector of the economy (final release) The monthly S&P Global report publishes (among other data) a composite PMI index and PMI indices in the manufacturing sector and in the services sector of the US economy, which are an important indicator of the state of these sectors and the US economy as a whole. A result above 50 is considered positive and strengthens the USD, below 50 is considered negative for the US dollar. The data above the value of 50 indicate an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and, especially, below the value of 50, the dollar may sharply weaken in the short term. Previous values of the PMI indicator: -composite 49.5, 44.6, 47.7, 52.3, 53.6, 56.0; - in the service sector 49.3, 43.7, 47.3, 52.7, 53.4, 55.6. The level of influence on the markets (final release) is medium. It is also lower than the similar report from ISM (American Institute of Supply Management) USA. PMI in the services sector of the economy (from ISM, Institute of Supply Management) The ISM Index is the result of a monthly survey of the largest US companies from 62 segments of the service sector, which accounts for almost 90% of US GDP and about 80% of the country's working citizens. Previous values: 56.7 in September, 56.9 in August, 56.7 in July, 55.3 in June, 55.9 in May, 57.1 in April, 58.3 in March, 56.5 in February , 59.9 in January. Forecast for October: 56.0. This is a high figure. A result above 50 indicates an increase in activity and is seen as a positive factor for the USD. However, a stronger relative decline in the index could negatively impact the dollar in the short term. The level of influence on the markets is medium to high. Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325632
InstaForex expects risky assets to regain demand if the US CPI declines

Awaited Fed's interest rate decision is made on Wednesday - InstaForex talks important events of the next week

InstaForex Analysis InstaForex Analysis 30.10.2022 19:44
Wednesday 02 November Germany. Index (PMI) of business activity in the manufacturing sector (final release) This S&P Global report is an analysis of a survey of 800 purchasing managers that asks respondents to rate the relative level of business conditions, including employment, production, new orders, prices, supplier shipments and inventory. Since purchasing managers have perhaps the most up-to-date information on the situation in the company, this indicator is an important indicator of the state of the German economy as a whole. This sector of the economy forms a significant part of Germany's GDP. A result above 50 is considered positive and strengthens the EUR, below 50 is considered negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro. Previous values: 47.8, 49.1, 49.3, 52.0, 54.8, 54.6, 56.9, 58.4, 59.8, 57.4, 57.4, 57.8 , 58.4, 62.6. The preliminary value was 45.7. The level of influence on the markets (final release) is average. Eurozone. Index (PMI) of business activity in the manufacturing sector (final release) The Eurozone Manufacturing PMI (from S&P Global) is an important indicator of the state of the entire European economy. A result above 50 is considered positive and strengthens the EUR, below 50 is considered negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro. Previous values: 48.4, 48.9, 49.8, 52.1, 54.6, 56.5, 58.2. The preliminary value was 46.6. The level of influence on the markets (final release) is average. USA. ADP Private Sector Employment Report ADP will present the monthly report on employment in the private sector of the US economy in October. This report usually has a strong impact on the market and dollar quotes, although, as a rule, there is no direct correlation with Non-Farm Payrolls. Strong data has a positive effect on the dollar; a decrease in the indicator can negatively affect it. In any case, during the release of this report, there may be an increase in volatility in the market and, above all, in dollar quotes. Previous values: 208,000 in September, 185,000 in August, 270,000 in July, 358,000 in May, 457,000 in April, 425,000 in March, 375,000 in February, 372,000 in January 2022. The level of influence on the markets is medium to high. USA. The Fed's interest rate decision. Fed Commentary on Monetary Policy The level of interest rates is the most important factor in assessing the value of a currency. Most other economic indicators are only looked at by investors to predict how rates will move in the future. The Fed is widely expected to raise interest rates again by 75 bps (up to 4.00%) and, possibly, will announce plans for its further increase, and Fed Chairman Jerome Powell will explain the decision. Market participants expect the US central bank to accelerate the tightening cycle of monetary policy. However, what will happen after the November meeting is not entirely clear. During the announcement of the Fed's decision, volatility in the market usually increases sharply, primarily in the US stock market and in dollar quotes. Powell's comments could affect both short-term and long-term USD trading. A more hawkish stance on the Fed's monetary policy is seen as positive and strengthens the US dollar, while a more cautious stance is seen as negative for the USD. Investors want to hear Powell's opinion on the Fed's plans for this year. The level of influence on the markets is high. USA. FOMC (Open Market Committee) press conference The press conference of the Federal Open Market Committee is used by the Fed to communicate with investors regarding monetary policy. It examines the factors that influenced recent interest rate decisions and comments on the economic environment in which the decision was made. The FOMC press conference lasts about an hour and consists of two parts. The first part reads the ruling, followed by a series of questions from invited members of the press and answers from the leadership of the Fed. Almost always, the course of the Fed's press conference (after the meeting on monetary policy) is accompanied by an increase in volatility in the markets, primarily in dollar quotes and US stock market instruments. The level of influence on the markets is high. Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325632
Wow! Federal Reserve decision is not everything next week! What's ahead? InstaForex talks many economic events (Monday) - 30/10/22

Wow! Federal Reserve decision is not everything next week! What's ahead? InstaForex talks many economic events (Monday) - 30/10/22

InstaForex Analysis InstaForex Analysis 30.10.2022 19:32
  The last full trading week of October has ended, extremely volatile, during which meetings of three largest world central banks (Canada, eurozone, Japan) took place at once. If the decisions taken by the European Central Bank (ECB) and the Bank of Japan (BOJ) on interest rates coincided with market expectations, then the Bank of Canada made an unexpected decision, surprising investors. The central bank raised its interest rate by 50 basis points to 3.75%, although markets had expected a 75 bps hike. The decision, which appears to have been fueled by growing concerns about the threat of a slowdown in the Canadian economy and a deepening global recession, disappointed market participants and sent the Canadian dollar sharply weaker. Moreover, the head of the bank, Tiff Macklem, said that the central bank is nearing the end of the tightening phase, although further interest rate hikes are still possible. Next week, market participants will focus on two main and key events: the Federal Reserve (Fed) meeting and the release on Friday of the monthly report of the US Department of Labor for October. In addition, the Reserve Bank of Australia (RBA) and the Bank of England (BoE) will also hold their meetings on monetary policy issues. A lot of important macro statistics for China, Germany, the eurozone, Canada, New Zealand, and the USA will also be published. In other words, the coming week will be even more volatile. But it also carries a ton of trading opportunities. Take note that next week European countries are switching to winter time: in the trading terminals of forex brokers and in the economic calendar, the time will be shifted back by 1 hour. Monday 31 October Australia. Retail sales level The Retail Sales Level Index is the main indicator of consumer spending, which accounts for the majority of overall economic activity. It is also considered an indicator of consumer confidence and reflects the state of the retail sector in the short term. The growth of the index is usually a positive factor for the AUD; a decrease in the indicator and worse-than-expected data are negative. Previous index values: +0.6%, +1.3%, +0.2%, +0.9%, +0.9%, +1.6%, +1.8%, +1.8 % (in January 2022). September forecast: -0.2%. The level of influence on the markets is average. China. Chinese Federation of Logistics and Purchasing PMI (CFLP) business activity indexes in the manufacturing and services sectors of the Chinese economy This report is an analysis of a survey of 3,000 purchasing managers, in which respondents are asked to rate the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventory. Purchasing managers have perhaps the most up-to-date information about the situation in the company, so this indicator is an important indicator of the state of the Chinese economy as a whole. Since the Chinese economy is, according to various estimates, the first in the world (at the moment), Chinese macro data can have a big impact on the financial market and investor sentiment, especially on the markets of the Asia-Pacific region. Data above 50 indicates an increase in activity. The relative growth of the index and values above 50 should have a positive impact on the CNY. Previous values: 50.1, 49.4, 49.0, 50.2, 49.6, 47.4, 49.5, 50.2, 50.1 (in January 2022) for manufacturing PMI , and 50.6, 52.6, 53.8, 54.7, 47.8, 41.9, 48.4, 51.6, 51.1 (in January 2022) for Services PMI. Forecast for October: 49.2 and 51.9, respectively. The level of influence on the markets is medium to high. Germany. Retail sales The statistical office of Germany will publish a report with data on retail sales. The change in the indicators of the report on retail sales affects the indicator of consumer spending, indirectly indicating the state of the German economy and the level of income of citizens. The German economy is the locomotive of the entire European economy. Therefore, euro quotes are very sensitive to the release of important macro statistics for Germany. A high result usually strengthens the euro, and vice versa, a low result weakens it. Data better than the forecast and/or the previous value is likely to have a positive impact on the euro, but - in the short term. Previous values: -1.3% (-4.3% YoY), +1.9% (-2.6% YoY), -1.5% (-9.6% YoY) , +1.2% (+1.1% YoY), -5.4% (-0.4% YoY), +0.9% (-1.7% YoY), + 0.2% (+6.9% YoY), -0.2% (+10.1% YoY) in January 2022. September forecast: -0.4% (annualized). The level of influence on the markets is medium to high. Eurozone. GDP for the 3rd quarter (preliminary estimate). Consumer Price Indices in the eurozone (preliminary release) Eurostat will publish a report with preliminary data on eurozone GDP for the 3rd quarter. There are three versions of the quarterly GDP, published at intervals of approximately 20 days - Preliminary, Updated, Final (final release). The pre-release is the earliest and therefore tends to have the most impact on the markets. This report reflects the general economic performance of the eurozone countries and has a significant impact on the decision of the ECB on monetary policy. GDP growth means an improvement in economic conditions, which makes it possible (with a corresponding increase in inflation) to tighten monetary policy, which, in turn, usually has a positive effect on national currency quotes. This report usually causes an increase in volatility in EUR quotes. It is likely that the release of the report with data on eurozone GDP for the 3rd quarter will be released with positive indicators. Data worse than forecast/previous values will have a negative impact on EUR quotes. Previous values: +0.8% (+4.1% YoY) in Q2 2022, +0.6% (+5.4% YoY in Q1 2022), + 0.3% (+4.6% YoY) in Q4, +2.2% (+3.9% YoY) in Q3, +2.2% (+14, 3% YoY) in Q2 and a -0.3% drop (-1.3% YoY) in Q1 2021. The level of influence on the markets is medium to high. The Consumer Price Index (CPI) determines the change in prices in a certain basket of goods and services over a given period, being a key indicator for assessing inflation and changing consumer preferences. In the core consumer price index (Core Consumer Price Index, Core CPI), food and energy are excluded from the calculation for a more accurate estimate. Estimating the level of inflation is important for the management of the central bank in determining the parameters of the current monetary policy. A reading lower than forecast/previous could trigger a weaker euro as low inflation forces the ECB to stay loose on monetary policy. Conversely, rising inflation and its high level will put pressure on the ECB to tighten its monetary policy, which in normal economic conditions is assessed as a positive factor for the national currency. Previous CPI values (annualized): +9.9%, +9.1%, +8.9%, +8.6%, +8.1%, +7.4%, +7.4 %, +5.9%, +5.1% (in January 2022). Previous Core CPI values (annualized): +4.8%, +4.3%, +4.0%, +3.7%, +3.8%, +3.5%, +3, 0%, +2.7%, +2.3% (in January 2022). The level of influence on the markets (preliminary assessment) is high. Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325632
In Hungary Both Core And Headline Inflation Ending Up

Next week National Bank of Hungary decides on interest rate, which ING Economics believe to be unchanged

ING Economics ING Economics 21.10.2022 14:37
With the National Bank of Hungary switching to a "whatever it takes" approach to ensure stability, we expect the base rate to remain unchanged at 13%, while the effective rate should remain at 18%. In Poland, data on money supply and unemployment will be in focus  In this article Poland: Cash in circulation continues to decline, unemployment remains unchanged Hungary: Base rate is expected to remain unchanged at 13% Source: Shutterstock   Poland: Cash in circulation continues to decline, unemployment remains unchanged Money supply (7.3% year-on-year): We estimate that money supply (M3) went up by 7.3% YoY in September vs. a 7.4% YoY increase in October. Both household deposit and corporate deposit growth are projected to increase in annual terms. At the same time, loans to households are very poor as mortgage loans are in free fall, whereas loans to enterprises are expanding robustly (mostly current loans). We forecast that cash in circulation continued to see a monthly decline. Registered unemployment (4.8%): We project registered unemployment to have remained unchanged at 4.8% in September. The economy is slowing, albeit gradually, and demand for labour remains solid. Tight labour markets and shortages of skilled workers are making businesses reluctant to lay off staff which may be difficult to re-employ later on. We expect labour hoarding during the current downturn to be substantial. Hungary: Base rate is expected to remain unchanged at 13% The National Bank of Hungary held an emergency meeting in mid-October, switching to a ‘whatever it takes’ approach. We expect the central bank to maintain this new modus operandi to ensure market stability. This means no material change in the monetary policy set-up at the upcoming regular rate-setting meeting. We expect the base rate to remain unchanged at 13%, while the effective rate (the new overnight deposit quick tenders rate) should remain at 18%. In addition to monetary policy, the focus will be on labour market data. With more and more companies giving one-off support to their employees or raising wages to mitigate the impact of the cost-of-living crisis, we expect an acceleration in wage growth. On the other hand, some companies are reacting to rising energy bills with cost-saving steps, translating into a higher unemployment rate. Key events in EMEA next week Source: Refinitiv, ING This article is part of Our view on next week’s key events   View 3 articles TagsPoland Hungary EMEA Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Run Higher In Japanese Yields Is Likely To Create Further Volatility In Global Markets

Next Week We Get To Know Chinese PMI, Japanese Composite PMI, Korean Local Business Surveys And More

ING Economics ING Economics 22.09.2022 15:28
Regional PMI reports and industrial output data are the highlights of the coming week Source: Shutterstock Regional PMI readings: weak manufacturing PMI is expected China’s PMI is expected to follow the declining trajectory of the previous months. The worrying amount of Covid cases in China led to the tightening of measures in multiple cities including in the tech hub of Shenzhen, as well as a weeks-long lockdown in Chengdu. This could contribute to falls in orders, employment and business confidence, leading to the Caixin Manufacturing PMI and NBS non-manufacturing PMI falling for the fourth straight month. The impact of the economy might be cushioned for large-scale and state-owned firms surveyed in the NBS manufacturing PMI as orders and input costs for these companies are stable and business sentiment is less affected, contrary to that of private companies.  In Japan, we believe that the reopening of the economy is likely to support service sector activity. Thus, the composite PMI is expected to rebound mainly on a rise in the services PMI while the manufacturing PMI continues to fall. In Korea, local business surveys are due to be released next week, and these are expected to deteriorate amid several headwinds, such as high interest rates both at home and abroad, production disruptions at major steel factories due to typhoons, and poor performance expectations in the semiconductor sector. The recent depreciation of the Korean won probably played a role in worsening the sentiment as well. Regional industrial production data points to a slowdown Japan, Korea, and Singapore will release their August industrial production data next week which will suggest a slowdown in manufacturing activity throughout the Asian region. In Japan, despite a boost from the reopening, industrial production in August is expected to take a breather and decline moderately after a strong gain over the past two months. South Korea's industrial production is expected to contract more intensely on the back of weak output from automobiles and IT/semiconductors. In Singapore, we also expect a modest monthly decline as the manufacturing PMI fell in August. However, as the material shortage situation has improved since June, the magnitude of the decline should be smaller than in the previous month.  India's repo rate The Reserve Bank of India will meet on 30 September to discuss interest rates. It is likely the Bank will hike its key repo rate by 30bp to 5.7%. As inflation rose from 6.7% in July to 7% in August, policymakers should continue to feel the pressure and increase repo rates in an attempt to cool the economy. Asia Economic Calendar Source: Refinitiv, ING Read this article on THINK TagsAsia week ahead Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Turkish Central Bank Cut Its Policy Rate by150bp | Credit Suisse Outflows Benefit UBS

What Can We Expect From Central Bank Of Turkey (CBT)? A Big Package Of Polish Economy Data Is Coming

ING Economics ING Economics 16.09.2022 15:00
Despite the Central Bank of Turkey implying in its forward guidance that further rate cuts are ahead, we believe it will keep the policy rate unchanged for now to assess the impact of recent moves. For Poland, we forecast that unemployment will remain at 4.9% whilst PPI inflation will decline to 24.5% In this article Turkey: Expecting the CBT to keep rates unchanged this month Poland: Key data for the week ahead Hungary: Further widening of the current account deficit Source: Shutterstock   Turkey: Expecting the CBT to keep rates unchanged this month While the Central Bank of Turkey (CBT) cut the policy rate last month in a surprise move, it did issue forward guidance implying further rate cuts were ahead, citing some loss in economic momentum. The CBT moves will likely be determined by FX developments, as the tourism season comes to end, as well as the growth outlook. We expect the CBT to keep the policy rate unchanged this month to see the impact of recent moves, though the risks are on the downside. Poland: Key data for the week ahead Industrial output: Annual growth of industrial production moderated to a single-digit pace in July (7.6%), but is projected to improve somewhat in August (9.8%) amid the less negative impact of the number of working days in year-on-year terms. The output should be supported by shorter summer production halts in the automotive industry and house appliances plants. Electricity production was also rather solid. Output was reduced in some energy-intensive industries due to the soaring price of natural gas. PPI inflation: We forecast that PPI inflation declined to 24.5%YoY in August from 24.9%YoY in July as prices in the manufacture of coke and refined petroleum products eased. Annual growth of metal products manufacture also declined. Unless we see yet another upswing in energy and industrial commodities, the producers’ prices should continue to decline. We believe that the peak is most likely behind us. Enterprise wages: In July, enterprise wages jumped up by 15.8%YoY boosted by one-off payments and compensations for high inflation in the mining, energy and foresting sectors. In August, growth is expected to be lower, albeit still at a double-digit level. Nevertheless, real wages in the enterprise sector are projected to turn negative again. The labour market remains tight, which is what drives wages upwards. Enterprise employment: Average paid employment went up by 2.3%YoY in July, with the number of posts increasing by 11,000 people versus the previous month. In August we expect a seasonal decline, but smaller than last year, which should drive annual employment growth up to 2.4%YoY. Despite signs of slowing activity, particularly in industry and construction, demand for labour remains solid, especially in services. Unemployment rate: The labour market is drained from skilled workers and even the inflow of refugees from Ukraine that have assimilated quite well and are active in the labour market is not putting upward pressure on the unemployment rate so far. Since January the number of unemployed people is on a downward path and the registered unemployment rate is projected to remain at 4.9% for the second month in a row in April. Hungary: Further widening of the current account deficit The National Bank of Hungary will release the second quarter current account balance and it is expected to be in the same ballpark that we saw during the first quarter. A roughly €2tr deficit is the result of the rising energy bill of the country, deteriorating the balance of goods in an extreme manner. An early estimation of the July balance suggests further widening of the current account deficit. When it comes to the labour market, we see wage growth accelerating further, as the price-wage spiral has started. More and more companies have announced extra compensation for employees (either one-off or mid-year salary hikes) in the last couple of months, which will be visible in the wage statistics as well. On the other hand, the news has also been about companies planning redundancies in the future (various surveys put the share of these corporates between 25-50%), thus we won’t be surprised if the unemployment rate reflects that development, moving a bit higher compared to the previous month. Key events in EMEA next week Source: Refinitiv, ING TagsTurkey Poland industrial production Hungary EMEA   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

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