The week ahead: 9 – 13 September 2024

United States – Wednesday sees the final main data release before the Fed's rate decision on September 18th in the form of August CPI figures. We expect core and headline CPI to have increased by 0.2% m/m. The shelter component is expected to moderate again after last month's pickup. Due to base effects, the y/y headline will then drop to 2.6% from 2.9%, while core remains at 3.2%. These readings would be consistent with reaching the 2% target and therefore would not tilt the balance of risks back to inflation after recently shifting to the employment mandate.

Eurozone – Next Friday eurozone industrial production will be published. With French and German industrial production already out and declining on a month to month basis, with Germany exceptionally weak, the eurozone aggregate is expected to decline as well. We expect the ECB to resume rate cuts at the September meeting, following the July pause. Disinflation is broadly continuing, with negotiated wage growth falling sharply in Q2, while downside risks to growth have intensified. There will be much attention on the ECB’s communication about the timing of further reductions. We expect further cuts at the October and December meetings, but division on the GC is likely to prevent any clear guidance on the outlook for rates. With regards the projections, we expect only modest changes, with the cut-off coming before the recent decline in oil prices, but on balance the risk is tilted to downward rather than upward revisions to inflation and growth.

China – We expect CPI inflation to pick up moderately, in line with consensus, partly driven by a turnaround in the food price cycle, although remaining at subdued levels reflecting weak domestic demand. Producer price inflation is expected to slide deeper into negative territory again. Annual growth of exports and imports is expected to slow compared to last month.