Key economic releases, week commencing September 21st, 2020

21 Sep, 2020 | Market Insights, Week Ahead | 0 comments

  • September Services PMI data for UK, US and EU to be published
  • UK Public Sector Borrowing set to jump – but this is typical for August
  • US Durable Goods could slide back to contraction

After a quiet start to the week for fundamentals, Tuesday sees the release of the CBI Industrial Trends Orders for September. Expectations are for a sharp improvement to be seen here, rising from the August print of -44 to something around the -25 mark. That would be the most upbeat reading since before the UK’s COVID lockdown and could offer some confidence that the severe depression seen by manufacturers in recent months could be abating.

The flash Eurozone Consumer Confidence data for September is also due for release. This reading slumped in April and May before recovering to around the -15 mark in recent months. There is however some concern that the number could deteriorate again, reflecting the growing economic toll of the ongoing COVID pandemic.

Wednesday sees a trifecta of Services PMI data for September from the Eurozone, UK and then US. The dominant services sector has been thrust into focus through the pandemic as consumer activity is constrained. Critically the Eurozone figure could slip below the break-even 50 mark after a short lived, two months recovery. The UK reading is forecast to show a contraction, down from the 58.8 seen a month ago, but still hold above 50. Similarly in the USA, having printed 55 in August, expectations have this number retreating to around 53.

Thursday sees a forward-looking indicator out from Germany, the Ifo Business Climate reading for September. Opinions seem divided as to what will be seen here and numbers due for release earlier in the week may provide a little more guidance. Failure to match the 92.6 posted last month would perhaps raise fresh concerns, not least given the fact the ECB is running out of stimulus options.

 Shortly after midnight on Friday, the UK Gfk Consumer Confidence reading for September will be published. A modest improvement from last months’ -27 is expected here, which given the ongoing rise in unemployment would again offer some reassurance that demand from consumers is returning.

Perhaps more concerning for the UK will be the Public Sector Net Borrowing figure, which is due to be published on Friday morning. This covers August and there’s usually a meaningful month-on-month decline here given the tax receipts which are received in July. Forecasts suggest the figure will be almost £10billion worse than a month ago – that would be in line with the usual July-August shift. Anything worse than that however could heap fresh pressure on the Pound.

Closing out the week, we have Durable Goods Order data from the US. This figure has rebounded sharply over the last few months with the economy playing catch up after the shut down. Momentum is however expected to fall away significantly with this print. Failure to deliver a positive reading may raise fresh questions over the health of the US economic recovery.

Article by Tony Cross of Monk Communications. This article first appeared in Octo
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