The Federal Reserve will probably slash interest rates by 25bps when it meets on Wednesday, after cutting them for the first time in a decade during July, due to ongoing growth concerns and muted inflation pressures. Investors will also await the publication of the FOMC’s latest forecasts for GDP, inflation and the funds rate. Regarding the US economic calendar, notable publications are industrial production, existing home sales, building permits and housing starts, second-quarter current account, Philadelphia Fed Manufacturing Index, NY Empire State Manufacturing Index, NAHB Housing Market Index, and overall capital flows.
Elsewhere in America, the Central Bank of Brazil is expected to cut its benchmark interest rate by 50bps to a new low, in an attempt to support the country's economic recovery. Also, key reports to follow include Canada inflation, retail sales and ADP Employment Change; Mexico private spending; and Argentina second-quarter GDP growth and unemployment.
In the UK, the Bank of England will decide on monetary policy, but no changes are expected, as the country faces greater political instability amid Brexit uncertainty. The country's inflation and retail trade data will also be in the spotlight.
Elsewhere in Europe, key economic data include: the Eurozone flash consumer confidence, construction output and current account; Germany investor morale and producer prices; Italy trade balance; and Turkey unemployment rate and consumer survey. Meanwhile, Norges Bank will probably hike its key interest rate by 25bps on Thursday while the Swiss National Bank is expected to keep interest rates at current levels.
The People's Bank of China will provide an update on its new loan prime rate (LPR) on Friday, which was set at 4.25 percent on August 20th. The LPR, which replaced the central bank’s benchmark lending rate, was designed to steer borrowing costs lower for companies and support the economy amid ongoing trade tensions with the US. Investors will also focus on industrial output, retail sales, fixed asset investment, and house price index.
The Bank of Japan will hold its monetary policy meeting on Thursday, but no changes are expected. On the economic data front important releases include trade balance, all industry activity index and consumer inflation rate. Meanwhile, the Reserve Bank of Australia will be releasing the minutes of its last monetary policy meeting. The country will also publish employment figures and house price index. Across the Tasman Sea, New Zealand's Q2 GDP growth and current account will be keenly watched.
Other key data for the Asia-Pacific region include: India wholesale inflation; Hong Kong unemployment rate; Singapore non-oil exports; and Thailand trade balance. Central banks in Indonesia and Taiwan will be deciding on monetary policy.