This week, investors' attention will be directed to the US Fed, which will decide on the further development of US monetary policy. On the old continent, the CPI index in the Eurozone or the PMI index in Germany will be reported. Among domestic indicators, the PPI index was reported on Monday morning.
On Wednesday, the US Federal Reserve will meet to decide on the future course of interest rates in the United States. At the moment, the market is projecting interest rates to remain at the current level, i.e. 5.5%. However, financial house analysts are forecasting at least one 25 basis point rate hike by the end of 2023.
The final August CPI readings in the euro area will be reported on Tuesday. The market is now forecasting the harmonised CPI at 5.3%. The index is expected to be driven mainly by rising fuel prices. Core inflation, which is a more important indicator for central bankers to make monetary policy decisions, is forecast to fall, from 5.5% in July to 5.3%. According to Bloomberg, the ECB is at the potential end of monetary policy tightening.
On Friday, we will see the preliminary September Eurozone PMI readings. According to Bloomberg, the composite PMI index will give a clue as to whether the region will go through a 'hard landing'. The composite index reached 48.6 b in July. In August, the index was reported at 46.7 b. It is now forecast to reach 46.6 b.
New and continuing claims for unemployment benefits
The market is forecasting 225k new claims for unemployment benefits this week. According to Bloomberg, the labour market is starting to cool and companies are starting to announce layoffs, especially in the financial services and information industries.
PPI in the Czech Republic
The PPI for August was reported on Monday morning. The index rose by 1.8% year-on-year against expectations of a 1.5% rise. Vladimír Klimeš, Head of the Industrial Prices and Foreign Trade Statistics Department of the Czech Statistical Office, commented on the August index readings as follows. Prices in agriculture fell for the fourth month in a row, this time by more than 16% yoy. Prices for construction work increased by an estimated almost 4% yoy and prices for market services for businesses rose by more than 5%."