The Big Three – TDS

Analysts at TD Securities (TDS) provide a snippet of three main market-moving events in the week ahead.

Key quotes:

UK Labor Market data: While the unemployment rate likely rose to its highest level since Aug-21, we expect another set of strong wage numbers to suggest to the MPC that Bank Rate might have to rise after September. While m/m wage growth should remain strong, upside pressure will also come from revisions. Private sector regular pay, the MPC’s preferred measure, likely remained at 8.2% 3m/y.

“US CPI: Core-price inflation likely remained the same in August, printing a third straight 0.2% m/m gain (0.20% unrounded). Goods inflation was likely a big factor to the downside again, with shelter prices remaining a key wildcard (we expect modest deceleration). Firming gas prices will drive non-core inflation higher. Our m/m forecasts imply 3.6%/4.3% y/y for total/core prices.

ECB Policy Decision: While a hike and a hold are almost equally likely, we now expect the ECB to keep the deposit rate unchanged at 3.75% at the September meeting, as data since the July meeting has not given the Governing Council much cause for concern. We also think this will mark the end of the tightening cycle, though risks still remain around an October hike.”