But markets might be more worried about a government shutdown.Chinese PMIs to be watched for recovery signs.The latest spike in oil prices is causing some headaches for policymakers as energy costs are on the rise again just as they’ve started to see the result of their hard-fought battle to get inflation down. In the United States, higher gasoline prices have already started to push headline inflation back up.
Any upside surprise in either or both personal consumption and core PCE would boost the odds of one final hike, pushing up Treasury yields and the US dollar.Ahead of Friday’s data, traders will also keep an eye on some housing numbers on Tuesday, which will include new home sales for August, as well as the September consumer confidence index. Durable goods orders are out on Wednesday, while on Thursday, the final estimate of Q2 GDP will be doing the rounds together with pending home sales.
For the moment at least, Eurozone inflation is falling, removing any urgency for policymakers to respond pre-emptively to any new inflationary threat.
However, the drip-feed stimulus has kept on coming and there are encouraging signs that they’ve started to have some effect. The PMI surveys for September will provide fresh clues if the economy is indeed stabilizing. The government will report its manufacturing and non-manufacturing PMI prints on Saturday, and the S&P Global/Caixin equivalent is due next Sunday.