The Week Ahead - 22 - 26 September 2025

United States – On Friday we get the next PCE inflation release. Details from the CPI and PPI reading suggest that core PCE is likely to come in at a somewhat milder 0.2% m/m, still keeping the y/y rate at 2.9%. We project headline to come in at 0.3% m/m, with the y/y at 2.7%, with some upside risk. Personal income and spending are as important as ever, to see if the Q3 rebound in spending persists, and we expect that it will at 0.5% m/m, while income growth likely slowed to 0.3% m/m. Apart from that, there will be plenty of Fedspeak, which provides opportunity to better understand the September decision and the Fed outlook.

Eurozone – We expect the eurozone flash PMIs to hold broadly steady in September following the recent uptick. Manufacturing has seen a particularly sustained rise lately, but the drag from weaker exports to the US – evident in the latest trade data – is likely to be increasingly felt over the coming months, offsetting optimism linked to German fiscal stimulus.

China – We expect the 1-year loan prime rate to be kept at 3.00% on Monday. Going forward, we expect some modest policy rate cuts and RRR cuts in the coming quarters to support the economy and fight deflation. The September rate cut of the Fed creates additional room for manoeuvre. At the other hand, the PBoC – with its multifaceted mandate - will likely remain cautious, also taking into account the ‘hot’ stock market.