RBC Capital Markets

Week ahead: The FOMC meeting minutes are the most notable event in the US in a very quiet week for data releases. Our economists do not expect anything new from the minutes. The conversation about forward guidance has been in full swing, so some nuggets related to that debate could possibly be gleaned. But Powell was fairly clear that they do not seem to be in a rush to conclude which approach they will use, since there is no need to do so. Outside the US, flash PMIsin the UK and Eurozone are the key releases (see below) and Canada has July CPI and June retail sales (see CAD). Norges Bank (Thursday) is the only G10 central bank announcing policy this week and should have very little new to say. In EM, CBRT announces on Thursday also.

JPY: Q2 GDP fell 7.8% q/q (non‐annualised) – slightly betterthan expected and leaving Japan as one of the more mildly affected economies in Q2. As expected, the bulk of the fall in GDP was accounted for by weaker consumer spending.

AUD: Tonight’s August RBA minutes are more out of date than usual given the detailed quarterly Statement on Monetary Policy (SoMP) released a few days after the board meeting and recent RBA speakers. As the VIC situation continues to unfold, the RBA will continue to assess its base case versus the alternative scenarios and is unlikely to say much more. Indeed, we note that there are no scheduled speeches by any senior RBA officials in the coming month or so. Any additional insights from the minutes into their resumed bond buying and YCC, which have stepped up since they flagged their intention at the August board meeting, will be noteworthy.   GBP: Negotiations on the UK’s future trade relationship with the EU resume tomorrow and last for most of the rest of the week. Data‐wise, the August flash PMIs (Friday) are the key releases this week. The surveys for July pointed to a relatively sharp rebound in activity during the month as restrictions across large swathes of the UK economy were eased. We look for a slight improvement in the services PMI of 57.0 (from 56.5 previously) and the manufacturing PMI to ease a little to 53.2 (from 53.3), signaling that the recovery that began in earnest in June with GDP expanding by 8.7% m/m should have continued well into Q3.

EUR: Flash PMIs are also the key releases in the Eurozone. While we still anticipate the PMIs to show activity improving, the pace of the recovery should begin to slow. We see the euro area expanding by 8.1% q/q in Q3.

CAD: We see little reason to deviate from StatsCan’s 24.5% m/m ‘flash’ estimate for June retail sales (Friday). The BoC’s three official core inflation measures have been very resilient during the pandemic, averaging 1.67% in June, but we expect them to tick lower in July (Wednesday).

Citi

Weekend headlines were ultimately thin, with the scheduled US-China Phase 1 progress check delayed indefinitely. USD weakness and mild risk-on have materialised as the deal remains intact with no immediate event risk. Away from this there was little to report on the macro front, apart from an election delay in NZD which sees FX here underperform G10.

Data wise, THB Q2 GDP posted a mild beat but was ultimately ignored. Away from this, only USD data is on the slate, with empire manufacturing and housing in focus. KRW, IDR, ARS and COP are out for local holidays.

 USD weakness was seen in Asia with most G10 and EM FX pairs notching mild gains. TWD and PHP lead the way, while NZD is the only real underperformer overnight on an election delay (more below). Catalysts wise, we note an indefinite delay to the weekend US-China Phase 1 trade deal progress check on  reported scheduling conflicts. No new date has been agreed, which seems to be read by the market as risk positive given the deal remains intact in the near term.

In equities, tech seems to be leading the way with Nasdaqfutures outperforming S&P. In Asia, Chinese indices lead on a PBoC liquidity injection with Taiex performing well too. Gold remains flat around 1945 while Brent/WTI are up 1% a piece.

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