The Week Ahead

While investors might want to take breather following the busy calendar last week, US dataflow might worth attention as we are counting down to the September 17 FOMC meeting. Meanwhile, with polls showing the jump in support to Scottish independence, the pound would be closely watched. Indeed, the pound has plunged to the lowest level since November 2013 against the US dollar while weakened against the euro despite ECB president Draghi’s announcement of QE last week. The RBNZ meeting due Thursday would be a non-event while BOJ minutes would unlikely catch much attention. In China, inflation data would be due on Thursday.

UK

The rapid selloff in GBP was mainly triggered by the dramatic rise in support for Scottish independence over the past week, ahead of the Scottish Referendum on September 18. Indeed, 2 polls suggested that voting for the Yes camp has surpassed the No camp last week. GBP is expected to remain under pressure should polling results signaling that Scottish independence is increasingly likely as the split would raise core UK’s debt levels if an independent Scotland refuses to take on its share of debt. Moreover, related economic uncertainties might cause the BOE to delay rate hike schedule while risks premium related to the upcoming UK Parliament election would increase.

US

The US dataflow is light this week .On Thursday, the monthly budget statement would show a widening of deficit to USD 132.8B in august from 94.6B a month ago. On Friday, retail sales for August probably shows a +0.4% m/m gain following the flat reading in July. Ex-auto sales might have gained +0.3%. The preliminary University of Michigan consumer confidence, also due Friday, might have added +0.6 point to 83.1 in September. Note also that former Fed Chair Ben Bernanke would deliver speech on Wednesday.

Japan

Released on Monday, Japan’s final estimate of 2Q14 GDP was revised lower to -1.8% q/q from the preliminary reading of a -1.7% contraction. It also represents an annualized -7.1% contraction, compared with the initial reading of a -6.9% decline. The downward revision was mainly driven by the sale tax hike which dragged consumption. Japan’s the current account surplus narrowed to 0.1 trillion yen in July from 0.13 trillion yen in June. The market had anticipated a widening to 0.18 trillion yen. The BOJ minutes would be due on Thursday

China

A number of macroeconomic data in China would also be released this week. The trade balance data would be due today with the surplus probably narrowed to USD 40B in August from USD 47.3B a month ago. Inflation report due Thursday would probably show that headline CPI easing to +2.2% y/y in August from +2.3% in the prior month. PPI deflation, however, contract -1.1%, accelerating from -0.9% drop in July

Australia and New Zealand

The number of payrolls in Australia probably increased +15K in August after falling -0.3K a month ago. The unemployment rate might have slipped -0.1% to 6.3% during the month. Both the NAB Monthly Business Survey for August and housing finance approvals data for July would be released on Tuesday. are also released on Tuesday. In New Zealand, the RBNZ meeting on Thursday would likely be a non-event. In the Eurozone, the IP and trade data would be due on Tuesday

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