Key events to watch in the week ahead: 19 – 25 August 2024
What are some of the key events to watch next week?
![Wall Street](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/news-article-image-folder/GT_US_Wall_Street_18-04-24.jpg/jcr:content/renditions/original-size.webp)
This week’s overview
Wall Street delivered a strong rebound this week, as stronger-than-expected jobless claims and US retail sales data pushed back against fears of a hard landing. The S&P 500 and Nasdaq extended its winning steak to the sixth straight day, while the VIX headed back below its key 20 level as a sign of risk-on sentiments in place.
Looking into the new week, here are six key events to watch.
US earnings season: Target, Snowflake, Zoom Video, Peloton, Baidu
The US earnings season is at its final phase, with the last major earnings probably revolving around Nvidia’s result release on 28 August 2024, after US market closes. Before then, we can look towards earnings from Target, Snowflake, Zoom Video, Peloton and Baidu in the upcoming week.
![US Earnings Dates](http://a.c-dn.net/c/content/dam/publicsites/sgx/images/rangeofmarkets/SGX_USEarningsDate_160824.png/jcr:content/renditions/original-size.webp)
20 August 2024 (Tuesday, 9.30am SGT): Reserve Bank of Australia (RBA) meeting minutes
At its August Board Meeting, the RBA kept its official cash rate on hold at 4.35%, as widely expected. In the accompanying statement, the RBA sounded hawkish and noted that while inflation is easing, it is still well above the midpoint of the RBA's 2-3% target range.
Adding to the cautionary note, the RBA highlighted that quarterly underly inflation has been above the midpoint of the target for 11 consecutive quarters and "has fallen very little over the past year."
The RBA retained the sentence that the Board wasn't "ruling anything in or out." It also retained the sentence at the end of the statement that "the Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome."
Since the recent Board meeting, RBA Governor Michele Bullock has maintained a hawkish tone. Speaking to a parliamentary panel this week, she stated it would be "premature to be thinking about rate cuts." We expect that the RBA meeting minutes will echo this hawkish sentiment.
However, the rates market paints a different picture. It anticipates a rate cut as the RBA's next move, with 21 basis points (bp) of rate cuts priced in by year-end and three full rate cuts expected by July.
![Graph of the Cash Rate Target](http://a.c-dn.net/c/content/dam/publicsites/sgx/images/rangeofmarkets/SGX_GraphOfTheCashRateTarget_160824.png/jcr:content/renditions/original-size.webp)
22-24 August 2024: Jackson Hole Symposium
The Jackson Hole Symposium will be held from 22-24 August 2024, which may be looked upon for greater clarity over the global economic trajectory and the outlook for monetary policies across various central banks. Eyes will be on the Federal Reserve (Fed) Chair Jerome Powell’s speech next Friday, which is widely expected to lay the groundwork for a September rate cut. But with that already fully priced by markets, interest will instead revolve around how deep the rate cut will be in September and beyond.
Recent economic data showed that US inflation is moving in the right direction towards the Fed’s 2% target, while strength in US consumer spending continue to push back against hard landing risks. That may not warrant too aggressive easing for now, which may see the Fed Chair downplay a 50 bp September move, but retaining his data-dependent stance for subsequent meetings. With eyes on labour conditions as well, he could potentially choose to await more cues from next month’s job report before making any heavier commitment.
22 August 2024 (Thursday, 4pm SGT): Euro Area’s Hamburg Commercial Bank (HCOB) Composite Flash Purchasing Managers' Index (PMI)
In July, the Euro area’s HCOB composite PMI eased for the second straight month to 50.2, down from previous 50.9. This comes as manufacturing activities remained in contractionary territory at 45.8, while services activities ticked lower to 51.9 from 52.8 prior, which points to a broad-based weakening of economic conditions. Notably, business activity and employment growth were close to a stall.
Markets are widely expecting the European Central Bank (ECB) to cut rates by 25 bp to 3.5% in the September meeting, amid slowing services inflation and a deteriorating growth outlook. A weaker showing in the upcoming PMI read will likely anchor the case for more aggressive rate easing ahead, with greater urgency for back-to-back cuts to support the economy.
![HCOB Eurozone Composite PMI](http://a.c-dn.net/c/content/dam/publicsites/sgx/images/rangeofmarkets/SGX_HCOBEurozoneCompositePMI_160824.png/jcr:content/renditions/original-size.webp)
22 August 2024 (Thursday, 2am SGT): US Federal Open Market Committee (FOMC) minutes
At its last meeting in July, the FOMC kept the Fed Funds rate unchanged at 5.25%-5.50%, as widely expected.
In the accompanying statement, the Fed said that inflation was making further progress towards the Fed's 2% inflation objective and that "the Committee judges that the risks to achieving its employment and inflation goals continue to move into better balance."
In the press conference, Fed Chair Powell flagged a possible rate cut, stating "a reduction in our policy rate could be on the table" if inflation continues to fall.
The minutes are expected to sound dovish and reinforce expectations that a Fed rate cut will most likely be delivered in September. The rates market has already moved to price in a full 25 bp rate cut by September, with a cumulative 94 bp of Fed rate cuts priced before year-end.
![US Fed Funds rate](http://a.c-dn.net/c/content/dam/publicsites/sgx/images/rangeofmarkets/SGX_USFedFundsRate_160824.png/jcr:content/renditions/original-size.webp)
23 August 2024 (Friday, 7.30am SGT): Japan’s inflation rate
In June, Japan’s headline inflation held steady at 2.8%, while core inflation ticked higher to 2.6% from 2.5% prior. A rebound in services sector prices, coupled with stronger wage growth and concerns around the weak yen, seem to offer the justification for the 15 basis point rate hike at the July meeting.
Policymakers guided that the likelihood of achieving ‘sustainable and stable 2% inflation’ is increasing, and that they may keep raising rates if the economy and prices move in line with its projection. Its latest quarterly economic report projects lower inflation this fiscal year at 2.5% from 2.8% prior, but higher inflation forecast for the next fiscal year at 2.1% from 1.9% prior.
Further rise in inflation rate, particularly the core aspect, will likely support the case for additional rate hike towards the end of this year. But given the recent market rout, any upcoming step will likely be taken with caution by policymakers so as to avoid any overreaction in global markets.
![Japan's inflation rate % YoY](http://a.c-dn.net/c/content/dam/publicsites/sgx/images/rangeofmarkets/SGX_JapanInflationRate_160824.png/jcr:content/renditions/original-size.webp)
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