Mon: PBoC LPR, EZ Consumer Confidence Flash (Sep)Tue: Riksbank Announcement, EZ/UK/US Flash PMIs (Sep)Wed: CNB Announcement, Australian CPI (Aug), German Ifo Survey (Sep)Thu: SNB Announcement, Banxico Announcement, BoJ Minutes, PBoC MLF, German GfK Consumer Sentiment (Oct), US Durable Goods (Aug), US GDP (Q2), US PCE (Q2)Fri: Japanese Tokyo CPI (Sep), US PCE (Aug), US University of Michigan Final (Sep)PBoC LPR/MLF (Mon/Thu): The PBoC is expected to leave its Loan Prime Rates unchanged for the fourth consecutive month, with the 1yr and 5yr rates seen steady at 3.00% and 3.50%, respectively, according to a Reuters survey of 20 respondents. The decision follows the PBoC keeping the seven-day reverse repo rate steady after the Fed’s recent 25bps cut, with officials previously signalling that any adjustment to LPRs would only follow changes in the policy rate. Desks note that recent activity data showed broad weakness, raising calls for additional stimulus, albeit market watches cited by Reuters suggest resilient exports and a stock market rally have eased immediate pressure for stimulus. That being said, some desks suggest a non-zero chance of no action. Macquarie suggests incremental measures remain likely to secure the government’s “around 5%” growth target, with a 10bp rate cut possible by year-end. Barclays, meanwhile, remains cautious on the size of fiscal support should the US-China trade truce hold.Riksbank Announcement (Tue): There is currently no newswire consensus ahead of the Riksbank decision, so taking a look at SEB, analysts expect the Bank to reduce its policy rate by 25bps to 1.75% (prev. 2.00%). Though it is worth highlighting that a SEB survey showed that the majority of respondents (64%) expect the Riksbank to keep rates steady in September, favouring a November cut instead. As a reminder, the Riksbank kept rates steady at the last meeting, as expected, and outlined that there was still some probability of a further interest rate cut this year, in line with the June forecast. Back to this meeting, inflation cooled a touch in August, with the core CPIF Y/Y metrics falling to 2.9% from 3.2%, and by more than the expected 3.1%. SEB highlights that while the metrics remain elevated, there are hints that the Riksbank was correct to suggest the summer upticks were driven by temporary factors. Inflation aside, economic activity data continues to remain weak, but there are some signs of recovery; the latest unemployment rate cooled slightly from the prior to 8.7%, GDP was weak, and consumer confidence is beginning to show signs of recovery. Overall, SEB favours a 25bps cut, suggesting that the cooling inflation plays in favour of a cut, though Nordea focuses on elevated inflation and recovering economic activity data, as justification for a hold. Further out, focus will be on the Bank’s updated rate path. Currently, the MPR for Q4’25 points to some chance of a further rate cut. If delivered in September, more focus will be on the path pencilled in for Q1/Q2’2026 (currently 1.88%).EZ Flash PMI (Tue): Expectations are for September’s manufacturing PMI to rise to 51.0 from 50.7, services to hold steady at 50.5 and the composite to tick higher to 51.2 from 51.0. As a reminder, the prior release saw the composite PMI metric move further into expansionary territory with the pace of expansion ticking up to a one-year high. This time around, Oxford Economics notes that the data “should offer a more complete picture of what growth looked like during Q3”. The desk adds that it expects “a small improvement in the Eurozone numbers, although at current levels, the PMI still suggests a weak pace of GDP growth. We think manufacturing activity will be slightly stronger than services, although with both measures close to the 50-point threshold, the difference is minimal, and growth is weak in both sectors”. From a policy perspective, with the ECB standing pat on policy earlier this month and the Governing Council judging that inflation is consistent with its target over the medium term, the data would need to show a sizeable deterioration to put the prospect of further rate cuts back on the table. As it stands, markets price just 4bps of loosening by year-end.UK Flash PMI (Tue): Expectations are for September’s services PMI to decline to 53.9 from 54.2, manufacturing to slip to 46.9 from 47.0 and composite to slide to 53.0 from 53.5. As a reminder, the prior release saw the August composite metric extend further into expansionary territory thanks to a jump in the services component. The accompanying report noted the data indicated “that the pace of economic growth has continued to accelerate over the summer after a sluggish spring, the rate of expansion now at a one-year high”. This time around, analysts at Investec expect a sideways movement in the manufacturing PMI on account of caution ahead of the November budget. For the services sector, the desk also expects potential upcoming fiscal concerns to weigh on sentiment and sees a decline to 53.5, which would leave the composite at 53.0. Investec cautions that such an outturn would not “not necessarily carry a strong message for official value-added data”, noting that the correlation between the composite PMI and month-on-month GDP growth is far from perfect”. From a policy perspective, with inflation set to rise to 4% in September, the release will likely have little sway on BoE easing expectations, with just an 8% chance of a 25bps reduction in November priced by markets as policymakers await the Autumn budget later in the month.Australian CPI (Wed): The August Monthly CPI Indicator is expected to rise to 2.9% Y/Y (prev. 2.8%), with Westpac seeing a firmer 3.1%, citing base effects. July CPI saw an upside surprise at 2.8% Y/Y (vs. exp. 2.7%), driven by a 0.9% M/M increase led by electricity, new dwellings, and holiday travel. Westpac suggests that for August, electricity costs in NSW and the ACT are set to ease as rebates are applied, partly offsetting further increases elsewhere, with the desk pencilling in a 3% rise in power prices. Overall, Westpac estimates headline CPI will

Yannis Stournaras is the Governor of the Bank of Greece and thus a member of the European Central Bank Governing Council (monetary policy setting committee). Speaking in Copenhagen, Stournaras said the ECB is probably done cutting interest rates, unless there is a meaningful deterioration in inflation or growth. Stournaras explained that while inflation is forecast to remain slightly below 2% for several years, “that alone isn’t enough to justify more interest-rate reductions.” He described policy as being in “a good equilibrium – not a perfect equilibrium, but a good one,” adding: “For the moment there’s no reason to act on rates.”Officials kept borrowing costs unchanged last week for a second meeting in a row, viewing price pressures as contained and risks as manageable. “We’re data dependent — if we find in our monetary-policy meetings that things have changed, we’ll change as well,” Stournaras said, but stressed that “it would take a substantial change in our outlook to change our position.”He also noted that risks remain tilted to the downside from tariffs and geopolitical uncertainty, though “these risks aren’t severe enough to justify another cut.” The ECB’s September forecasts project inflation at 1.7% next year and 1.9% in 2027, with December’s update extending to 2028. “For the moment we think that 2028 inflation is going to be close to 2%, but close from below not from above,” he said, urging caution.Stournaras downplayed the significance of another quarter-point cut, saying it “won’t have much of an impact in practice, but symbolically, yes, it might.” He also rejected the idea that a stronger euro alone would shift policy: “We’re not in a situation in which a single factor can change our position.” -Likely market-Impact of such comments: FX: Euro supported as ECB signals rate-cut cycle is over barring major shocks Rates: Eurozone bond rally may stall with ECB stressing data-dependency and “good equilibrium” Equities: Limited near-term boost for stocks as further easing seen unlikely This article was written by Eamonn Sheridan at investinglive.com. Source: investinglive.com (Read Full Article)