Central banks bonanza from Fed to PBOC, BOE and BOJ (Sep 18-22 2023)

Summary:

A flurry of central bank meetings are scheduled in the week ahead, and inflation concerns are unlikely to be on the backburner with crude oil prices rallying to fresh highs. Base case for Fed is a hawkish pause with focus more on the pushback to 2024 rate cuts, while the Bank of England faces a much more split decision with officials lately appearing inclined to end the tightening cycle. China’s expanding stimulus toolkit suggests LPR may not be cut, while Bank of Japan will still likely continue its massive easing while FX concerns could take centre-stage. Inflation is also due from UK and Japan and earnings focus on FedEx.

Overview:

• Fed’s hawkish pause could continue to be dollar positive
• China’s Loan Prime Rates expected to be unchanged
• Will August UK CPI mark an end to BOE’s tightening campaign?
• Bank of Japan’s Ueda may have the yen in focus
• EM easing cycle could get more legs as Brazil central bank cuts again

• Earnings – KB Home, FedEx, General Mills

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Earnings this week:

Tuesday: AutoZone (AZO)

Wednesday: FedEx (FDX), General Mills (GIS), KB Home (KBH)

Thursday: Darden Restaurants (DRI), FactSet Research (FDS), Manchester United (MANU)

Key economic events this week:

MON: Japanese Holiday; Canadian Producer Prices (Aug)

TUE: RBA Minutes (Sep); EZ Current Account (Jul), US Building Permits/Housing Starts (Aug), Canadian CPI (Aug)

WED: FOMC, PBoC LPR, BCB Policy Announcements, BoC Minutes (Sep); Japanese Trade Balance (Aug), UK CPI (Aug), Swedish Unemployment (Aug), New Zealand GDP (Q2)

THU: BoE, SNB, Riksbank, Norges Bank, SARB & CBRT Policy Announcements; EZ Flash Consumer Confidence (Sep), New Zealand Trade Balance (Aug)

FRI: BoJ Policy Announcement; EZ/UK/US Flash PMIs (Sep), Japanese CPI (Aug), UK Retail Sales (Aug), Canadian Retail Sales (Jul)