In US, we have Aug CPI as well as Aug PPI data being released this week along with Sep provisional data for University of Michigan. Fed officials are entering a blackout period from public events before their 18th Sep FOMC meeting. We expect headline (+0.2% forecast vs. +0.15% previously) and core (+0.23% vs. +0.17%). we think CPI data this week will have little impact on the Fed’s decision to commence easing. We see a moderating growth momentum across cyclical sectors but it is nowhere close to recession indicators. US consumer spending remains strong, bankruptcies are lower & both corporate & household balance sheet remains strong. In Eurozone, ECB meeting outcome is likely a 25 bps cut with a dovish press conference by ECB president Lagarde. Markets are only pricing in 2% policy rates from current 3.75% by mid CY25 which we feel is conservative considering the growth slowdown seen in Germany, the power house of Eurozone. UK data this week will likely show that pay gains are easing. But we think the Bank of England will remain cautious on rate cuts as underlying cost pressures remain elevated. And Chinese data might remain subdued as there is no sign of fiscal stimulus coming.
