Monday starts slow with nothing significant in terms of scheduled economic events for the FX market. On Tuesday the highlights will be the RBA monetary policy announcement, Canada’s GDP m/m, and the U.S. CB consumer confidence and JOLTS job openings prints.
On Wednesday, we’ll get inflation data for Australia following the RBA meeting and for the U.S., the ADP non-farm employment change, core PCE price index m/m and final GDP q/q. Thursday will bring the U.S. the unemployment claims and ISM manufacturing PMI.
Finally, on Friday data releases will include the Tokyo core CPI y/y, the eurozone inflation figures, and the U.S. average hourly earnings m/m, non-farm employment change and unemployment rate.
Several FOMC members are expected to deliver their remarks over the week.
At this week’s meeting, the RBA is expected to raise rates by 25bps to 4.60% and maintain a hawkish tone, given persistent inflation and a resilient labor market. Governor Bullock has previously stated that inflation risks are “materializing.” This keeps the possibility of further rate hikes on the table beyond the September meeting, although any additional moves will remain data-dependent.
Underlying inflation remains elevated, with the trimmed mean figure expected to hold at 3.6% in August, above the RBA’s year-end forecast of 3.3%. Higher fuel and food costs are also adding to price pressures given Australia’s reliance on imported oil products.
The labor market is another reason for a more hawkish stance. Despite unemployment rising to 4.6%, full-time employment has continued to grow, while the participation rate has reached a record 67.1%. Strong hiring suggests that demand for workers remains solid.
Overall, the RBA is expected to emphasize that inflation risks remain tilted to the upside, supporting a more restrictive policy stance and potentially providing some support for the AUD.
In Canada, the consensus for GDP m/m is 0.1% vs. the prior 0.3%. Canadian growth lost momentum in July, with preliminary data pointing to little or no change in GDP following a strong second quarter. Manufacturing, wholesale, and retail activity weakened, although stable energy output and a rebound in housing provided some support.
The picture improved somewhat later in the quarter, with hours worked and retail activity increasing in August, according to RBC analysts. Even so, higher U.S. tariffs and ongoing trade tensions are expected to add uncertainty to the growth outlook.
The Bank of Canada is closely monitoring these developments ahead of its October decision. Its current baseline is to keep rates unchanged in the near term, with a gradual hiking cycle expected to begin in early 2027.
In Australia, the consensus for CPI m/m is 0.5% vs. the prior 1.0%, while trimmed mean CPI m/m is expected at 0.3% vs. 0.5% previously. CPI y/y is forecast to rise to 4.1% from 3.5%.
Westpac expects August CPI to rise by 0.4% m/m, with its detailed estimate coming in at 0.43%. Food and non-alcoholic beverages are forecast to contribute 0.2 percentage points, driven by increases in bread and cereals, meat and seafood, and other food products.
This follows a stronger-than-expected July reading, when consumer prices rose by 1.0%. The increase exceeded both Westpac’s forecast of 0.8% and the market consensus of 0.9%, although annual inflation eased from 3.8% to 3.5%. With Westpac’s detailed August estimate slightly above its headline forecast, the monthly result carries some upside risk.
In the U.S., the consensus for the core PCE price index m/m is 0.3% vs. the prior 0.2%, while personal income m/m is expected at 0.5% vs. 0.4% and personal spending m/m at 1.0% vs. the 0.2%.
This week’s data will provide a broader update on the economy, with markets looking for stronger consumer activity. The PCE report, along with the third estimate of Q2 GDP, will be released alongside annual revisions covering roughly the past five years, which could reshape the recent picture of income, spending, savings, and inflation.
Methodological changes are expected to point to a softer near-term inflation trend, despite a firmer August reading, but overall, Wells Fargo analysts expect the data will continue to show a resilient U.S. economy, with consumer spending and strong technology investment remaining important drivers.
For the Eurozone, the consensus for the core CPI flash estimate y/y is 2.5% vs. the prior 2.4%, while the CPI flash estimate y/y is expected at 3.7% vs. the prior 3.2%. The key focus will be on whether higher energy costs start pushing services inflation higher.
Meanwhile, September PMIs point to continued resilience, with Q3 growth estimated at around 0.4%. Wells Fargo expects one final 25 bps ECB hike, taking the deposit rate to 2.75%, although the path remains data-dependent.
In the U.S., the consensus for average hourly earnings m/m is 0.3% vs. the prior 0.3%, while nonfarm employment change is expected at 98K vs. 162K previously. The unemployment rate is expected to remain unchanged at 4.1%, with labor force participation showing early signs of stabilization.
The labor market still appears relatively balanced, supported by low jobless claims, improving job postings, and hiring measures that remain above last year’s levels.
Wells Fargo analysts expect nonfarm payroll growth to slow to 90K in September following August’s stronger-than-expected reading. Local government education jobs could remain volatile after sharp swings in recent months.
Wage growth is expected to remain subdued, with average hourly earnings rising 0.3% m/m and 3.2% y/y. This would keep labor cost growth relatively contained and would not put pressure on inflation.
