What to Watch Out for in September: European Edition

The arrival of September is a big deal for the global financial markets, as traders shake off the summer doldrums and get back to action. The month of September will be especially critical for Europe, a region still struggling with weak economic growth and uncertainty stemming from the United Kingdom’s decision to quit the EU back in June. Traders looking to stay up to speed on European markets should mark their calendars for the following events.

September 2: US Nonfarm Payrolls

It doesn’t matter where you live or which market you follow, US nonfarm payrolls are a big deal. Arguably the most closely followed event of the month, the Labor Department’s nonfarm payrolls report provides critical information on the health of the US economy, helping the Federal Reserve determine its next course of action.

September 6: Eurozone GDP

The European Commission’s statistics branch will release revised second quarter GDP data in early September. Preliminary estimates showed the euro area economy expanded just 0.3% in the second quarter, as Italy and France stagnated while Germany’s expansion slowed from the previous quarter.

September 7: UK Data

Normally, the NIESR’s UK GDP estimate wouldn’t crack our must-watch list. This changed following the June 23 Brexit vote. Released monthly, the NIESR UK GDP estimate provides a snapshot of the economy’s performance over the previous three months.

Separately, the UK Office for National Statistics will release July industrial and manufacturing data.

September 8: ECB Interest Rate Decision

The European Central Bank (ECB) will release its next interest rate decision on September 8. Following a disappointing second quarter, ECB policymakers are feeling the heat, but are unlikely to lower rates in September. For starters, officials are still assessing the impact of previous easing campaigns. Secondly, central bank president Mario Draghi has expressed confidence that both GDP and inflation will rebound in 2017 and 2018.[1]

September 9: UK Consumer Inflation Expectations

With the consequences of Brexit still hanging in the balance, data on UK consumer inflation expectations are considered especially critical. While British consumers appear to have brushed off Brexit worries in the summer, this could change toward the end of the year as the Conservative government prepares to officially notify Brussels of its intention to leave the EU.

September 12: China Data

Chinese economic data will make headlines in the second week of September, with reports on retail sales, industrial production and foreign direct investment.

September 13: Eurozone, UK Data

A deluge of European data will make its way through the financial markets on September 13. Germany will release its final inflation data for August and the European Commission will report on Eurozone employment change for the second quarter. Meanwhile, the UK will also release official consumer and producer inflation data for August.

September 14: Eurozone Industrial Production

Industrial production, a broad measure of factory output that includes activity at manufacturing, mining and utilities companies, will be released for the Eurozone.

September 15: BOE Interest Rate Decision

The Bank of England (BOE) unanimously agreed to ease monetary policy at its August policy meeting. The Monetary Policy Committee lowered interest rates to 0.25% and increased the size of its monthly bond purchases by a combined £70 pounds to support economic growth following the Brexit vote. Governor Mark Carney has indicated that more stimulus may be on the way, making the September meeting especially critical.

September 16: US CPI

Weak inflationary pressures are just one factor keeping the Federal Reserve from raising interest rates. Investors tracking US inflation will be closely monitoring the September 16 CPI report.

September 21: BOJ, Federal Reserve Interest Rate Decisions

September 21 could be one of the most volatile days of the month with the Bank of Japan (BOJ) and Federal Reserve scheduled to release policy statements. The BOJ disappointed markets in July by making only modest changes to its stimulus program. Traders remain hopeful that the Bank will unleash a more aggressive stimulus campaign in the fall.

Meanwhile, the Federal Reserve will deliver its first interest rate decision since July. Traders generally expect the Fed to remain on the sidelines in September, but those expectations could quickly change depending on the health of the economic data leading up to the September 20-21 FOMC meeting.

September 29: US GDP

The Commerce Department will issue its third and final estimate of US second quarter GDP at the end of September. The world’s largest economy experienced back-to-back quarters of disappointing growth. The final estimate of Q2 GDP will also feature final data on core personal consumption expenditures (PCE), the Federal Reserve’s preferred measure of inflation.

September 30: UK GDP

The UK will also release its final estimate of second quarter GDP on the final data of September. Unlike the United States, UK GDP surprised to the upside in the second quarter. Analysts, policymakers and traders expect the tide to shift in the third quarter, leading to a prolonged slowdown as the Brexit aftershock begins to take hold.

[1] BBC.com (June 2, 2016). “Eurozone inflation and growth to pick up says Draghi.”

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