Fed’s Jumbo Rate Cut, Market Set To Rattle

Monday, 23 September 2024, 15:45 – US Manufacturing PMI (Sep)

The S&P Global US Manufacturing PMI was revised slightly down to 47.9 in August 2024 from a preliminary of 48. The data continued to point to the most marked deterioration in the health of the manufacturing sector so far this year. Production decreased for the first time in seven months as sales continued to fall amid increasing reports of demand weakness. A renewed reduction in employment was also recorded amid spare capacity in the sector. However, firms and analysts expected the demand will return to normal by the end of this quarter following the presidential election.

Tuesday, 24 September 2024, 06:30 – RBA Interest Rate Decision (Sep)

On August 6, 2024, the Reserve Bank of Australia (RBA) decided to keep its cash rate unchanged at 4.35%. This decision reflected the central bank’s assessment that inflation, although moderating from its 2022 peak, remains above target. While inflationary pressures have started to ease, the pace has slowed, with underlying inflation still exceeding the desired 2-3% range. The RBA revised its inflation forecast, pushing the timeline for achieving target inflation into 2026 due to lingering supply-side constraints and resilient aggregate demand. Given the current economic conditions and the Reserve Bank of Australia’s (RBA) cautious stance, it is likely that the RBA will continue to maintain the current interest rate in the near term.

Tuesday, 24 September 2024, 16:00 – US CB Consumer Confidence (Sep)

In August 2024, the Conference Board Consumer Confidence Index rose to 103.3, up from 101.9 in July, and exceeding the forecasted 100.9. This represents the highest level in six months, indicating increased consumer optimism about the economy. The boost in confidence was driven by better business conditions, moderate inflation, and steady economic growth. Given the current positive trend, future data is anticipated to show gradual improvement with inflation continuing to moderate over the next year, although recent Federal Reserve rate cuts may contribute to mixed sentiment.

Thursday, 26 September 2024, 09:30 – SNB Interest Rate Decision (Q3)

The Swiss National Bank (SNB) cut its policy interest rate by 0.25% on June 20, 2024, bringing it down to 1.25%. The decision was mainly due to the central bank anticipating that although inflation did increase slightly in April, coming up to 1.4% in May, it is now expected to come down to about 1.3% for the rest of the year, as inflationary pressures reduce. t The SNB noted in a press release that underlying inflationary pressures have lessened compared to the previous quarter. By lowering the policy rate, the SNB aims to maintain suitable monetary conditions. While some analysts had predicted another rate cut later in 2024, it is unlikely that the upcoming decision will bring any unexpected changes given the recent adjustment.

Friday, 27 September 2024, 14:30 – US Core PCE Price Index (YoY) (Aug)

In July, the Commerce Department announced that the core personal consumption expenditures (PCE) price index rose by 2.6% year-over-year, slightly lower than market expectation of 2.7%. This modest increase reflects a continuation of recent lower inflation trends and aligns with the Federal Reserve’s expectations before they consider easing their restrictive monetary policies. Given the current economic landscape, upcoming data is anticipated to stabilize and may gradually ease in the coming months.