Wednesday’s FOMC meeting will be the main focus of this week’s busy economic calendar. With recent data showing further weakness in the labor market and somewhat more modest inflationary pressures than anticipated, we expect a dovish 25 bps cut from Fed on Wednesday with DOTS showing another 50-bps cut in REMCY25. We also expect another 50-bps cut seen in CY26 front loaded to Q1CY26. We now expect the core PCE for Aug to come at .2% MoM due to lower prices for computer software & accessories, household linen & pharmaceuticals. In US macro data this week, we have retail sales, industrial production & housing starts data. In UST auctions this week, we have 13 BN USD supply of 20yr USTs on Tuesday & 19 BN USD supply of 20yr TIPS on Thursday. In RoW events, we have BOC meeting on 17th Sep where we expect a 25 bps cut due to higher worries on employment. We have BOE meet on 18th Sep where we expect a hold due to ongoing higher service inflation. We have BOJ meet on 19th Sep where we expect status quo but a 25 bps hike in Oct meeting. We also have wage data and CPI data in UK this week which might decide the future rate cut trajectory for BOE. We expect 25bp rate cuts in November and February from BOE if this week's data supports.
