Key Events This Holiday-Shortened Week: All Eyes On Friday’s CPI

After Friday’s blowout jobs report, attention now turns to inflation. Economists expect headline CPI (Friday) to rise by +0.4% month-on-month in August, up from +0.07% previously, while core CPI is expected to print at +0.2% month-on-month, broadly unchanged from July’s +0.22%. Higher gasoline prices are likely to support the headline reading, while core inflation should continue to benefit from gradually moderating shelter costs (which however are turning higher again per Case-Shiller). If realized, the forecasts would leave headline CPI broadly unchanged at 3.4% on a year-on-year basis while core inflation edges 10 bps lower to 2.4%.

Ahead of that, the PPI (Thursday) will provide another important input into the inflation outlook. Economists expect PPI to imply a +0.3% month-on-month increase in core PCE, up from +0.2% in July, leaving the annual rate rising to 4.6% from 4.2%. The remainder of the US calendar is relatively quiet, with markets closed today for the Labor Day holiday. However, the preliminary University of Michigan consumer sentiment survey (Friday) will also attract attention. Economists expect sentiment to decline to 51.0 from 51.7 in August, while the survey’s inflation expectations measures will be closely watched.

In Europe, the ECB policy decision (Thursday) will be the key event. DB’s European economists expect a 25bp rate increase, taking the deposit rate to 2.50%, and investors will focus on any guidance regarding the likelihood of further tightening. DB economists also expect an additional hike in December. They have also upgraded their 2026 and 2027 economic forecasts by 0.3pp and 0.1pp to 0.8% and 1.2% respectively. Economic data will also be closely monitored, including German industrial production (today) and trade data (tomorrow), French industrial production (Wednesday), and UK monthly GDP (Friday). Inflation releases from Sweden (today) and Norway and Denmark (Thursday) will provide additional insight into regional price pressures.

In Asia, China will dominate the calendar. DB economists expect the August trade balance (tomorrow) to show stronger activity, with exports and imports forecast to grow a significant 27% and 29% year-on-year respectively. Inflation data (Wednesday) are expected to show CPI accelerating to 0.8% year-on-year from 0.5%, while PPI inflation moderates to 3.2% from 3.5%. In Japan, key releases include labor cash earnings and the Economy Watchers survey (tomorrow), followed by PPI data (Friday).  A reminder that the BoJ has an important meeting on Friday week, less than 36 hours after the FOMC conclusion.

Beyond the economic calendar, the US Treasury’s expanded long-end buyback programme begins on Wednesday, increasing support operations in longer-dated maturities. In politics, the US Republican Party will hold its first midterm national convention in Dallas on Wednesday and Thursday, while Canada’s counter-tariffs on US imports come into force tomorrow. Corporate earnings highlights include Inditex (Wednesday) and Adobe and Oracle (Thursday). Oracle will be the key given all the focus on AI capex.  

Courtesy of DB, here is a day-by-day calendar of events

Monday September 7

• Data: China August foreign reserves, Japan July leading index, coincident index, Germany July industrial production, Sweden August CPI
• Other: US Labor Day holiday (markets closed)

Tuesday September 8

• Data: US August NFIB small business optimism, NY Fed 1-yr inflation expectations, July consumer credit, China August trade balance, Japan July labor cash earnings, BoP current account balance, BoP trade balance, August bank lending, Economy Watchers survey, Germany July trade balance, France July current account balance, trade balance
• Auctions: US 3-yr Notes ($58bn)
• Other: Canada’s counter-tariffs on US imports enter into force

Wednesday September 9

• Data: China August CPI, PPI, Japan August M2, M3, machine tool orders, France July industrial production
• Earnings: Inditex
• Auctions: US 10-yr Notes (reopening, $39bn)
• Other: US Treasury’s expanded long-end buybacks take effect, the Republican Party holds its first midterm national convention in Dallas (through Thursday)

Thursday September 10

• Data: US August PPI, existing home sales, July wholesale trade sales, initial jobless claims, UK August RICS house price balance, Italy July industrial production, Norway August CPI, Denmark August CPI, Sweden July GDP indicator
• Central banks: ECB’s decision, BoJ’s Masu speaks
• Earnings: Adobe, Oracle
• Auctions: US 30-yr Bond (reopening, $22bn)

Friday September 11

• Data: US August CPI, federal budget balance, September University of Michigan survey, Q2 household net worth, UK July monthly GDP, Japan August PPI, Germany July current account balance, Italy Q2 unemployment rate
• Central banks: ECB’s Lane speaks

Finally, focusing just on the US, Goldman writes that the key economic data release this week is the CPI report on Friday. Fed officials are not expected to comment on monetary policy this week, reflecting the blackout period ahead of the September FOMC meeting.

Monday, September 7 

• US Labor Day holiday observed. There are no major economic data releases scheduled. NYSE will be closed, SIFMA recommends bond markets remain closed.

Tuesday, September 8 

• There are no major economic data releases scheduled. 

Wednesday, September 9 

• There are no major economic data releases scheduled. 

Thursday, September 10 

• 08:30 AM PPI final demand, August (GS +0.4%, consensus +0.4%, last flat); PPI ex-food and energy, August (GS +0.3%, consensus +0.3%, last +0.2%); PPI ex-food, energy, and trade, August (GS +0.4%, consensus +0.3%, last +0.4%): As usual, we will watch the medical services and domestic passenger airfares components of this month’s PPI report for their read-through to PCE. Recent methodological changes mean that the portfolio management PPI is no longer an input into the PCE calculation, and that PPIs for data processing services and videogame software will be used to construct the computer software and accessories component of PCE. On net, we expect these changes to lead to a downward revision of 0.2pp to YoY PCE.
• 08:30 AM Initial jobless claims, week ended September 5 (GS 205k, consensus 205k, last 206k): Continuing jobless claims, week ended August 29 (consensus 1,780k, last 1,779k)
• 10:00 AM Existing home sales, August (GS -2.0%, consensus -1.6%, last -1.7%)
• 10:00 AM Wholesale inventories, July final (consensus +1.3%, last +1.3%)

Friday, September 11 

• 08:30 AM CPI (MoM), August (GS +0.39%, consensus +0.4%, last +0.1%); Core CPI (MoM), August (GS +0.23%, consensus +0.2%, last +0.2%); CPI (YoY), August (GS +3.40%, consensus +3.4%, last +3.4%); Core CPI (YoY), August (GS +2.40%, consensus +2.4%, last +2.5%): We estimate a 0.23% increase in August core CPI (month-over-month SA), which would lower the year-over-year rate by 0.1pp to 2.4% on a rounded basis. We expect mixed autos inflation, reflecting a 0.5% increase in used car prices, a 0.2% increase in new car prices, and a 0.2% decline in the car insurance category. We forecast benign readings for the shelter categories—a 0.22% increase in the OER category and a 0.23% increase in the rent category—reflecting the continued slowdown in their underlying trend. We expect firmer travel services inflation (airfares: +4%, lodging away from home: +0.3%), reflecting the signals from alternative price data. We estimate a 0.39% rise in headline CPI—reflecting higher food (+0.25%) and energy (+2.3%) prices—which would raise the year-over-year rate to +3.40% from +3.36%. Our forecast is consistent with a similar 0.22% monthly increase in the core PCE price index in August.
• 10:00 AM University of Michigan consumer sentiment, September preliminary (GS 52.0, consensus 51.0, last 51.7); University of Michigan 5-10-year inflation expectations, September preliminary (GS 3.3%, last 3.3%): We expect University of Michigan’s 5-10-year inflation expectations measure to remain unchanged at 3.3%, above its 1995-2019 average of 2.8%. We noted recently that these elevated levels in part reflect the increased politicization of survey responses and methodological changes rather than signaling an immediate risk of unanchoring.

Source: DB, Goldman, BofA