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Home » Popular Markets » Economics » The Week Ahead » The UK, US and the Eurozone in the week ahead
  • Eurozone PPI data to leave inflation back in focus
  • US payroll, wage data could help shape views over Federal Reserve policy tightening
  • UK Construction PMI risks highlighting supply chain bottlenecks and labour shortage


US Factory Order data for August will be in focus on Monday. This reading has been slipping over the last couple of months and there will be concern that labour shortages could be muddying the picture here. Current expectations are that a modest uptick from the 0.4% growth posted in July will be seen, but a surprise on the downside would have the potential to knock confidence in the broader market.

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Tuesday sees the publication of Eurozone PPI data for August. Having printed 12.1% in July, further gains are anticipated here with some estimates coming in just shy of 14% – something that should be a real concern to policymakers, especially given the ongoing impact of rising energy prices. The idea that inflationary pressures will be transitory is steadily losing credibility, with a big uptick here set to heap further pressure on the ECB to take action – something that could give the Euro another shot in the arm.


On Wednesday, expect the UK Construction PMI reading for September to be under scrutiny, again with one eye on the potential fall-out from supply chain issues. Having come in at 66.3 in June, the number has been sliding since then, reaching 55.2 in August and expectations are that the number will drift lower yet again. A modest decline is unlikely to cause much concern, but anything below 54 will reignite concerns that the UK economy is now facing real structural challenges off the back of the Brexit-induced labour shortage. If this is the case, Sterling is likely to be squeezed once again.

Also on Wednesday, we have the ADP Payroll reading for September out from the US. As we always note, this is the curtain raiser for Friday’s non-farm payrolls, but has the potential to provide some early direction. Forecasts are split as to whether there will be an improvement on the 374,000 uptick for August – which itself came in well below expectations. There’s mounting concern that the US economic recovery is floundering and another set of weak jobs numbers will turn attention back to the Fed and their pace of policy tightening – something which could ultimately be sufficient to prop up US equity markets.


Thursday sees the release of Halifax House Price data for September. With that covering the last stretch of the government stamp duty holiday, month-on month growth is still likely. Expectations are for another 1% or so to be added, a view which should be reinforced by recent mortgage lending data exceeding expectations. More critically it will be the performance in the coming months that will be most closely watched – falling prices as a result of a potentially too-generous government policy at a time when the economy may be sluggish will do little to support broader consumer confidence.


Rounding out the week we have September’s Bureau of Labour Statistics data from the US. Looking beyond the Non-Farm Payrolls, it’s the unemployment rate and wage growth which will be in focus. The former is expected to nudge lower from August’s 5.2% to around 5%, whilst annualised wage growth is set to be around 4.2%. This latter figure risks being a cause for concern given it’s notably below inflation and as such again makes it difficult for the Fed to risk burdening consumers with a higher interest rate environment.


This article is not investment advice. Investors should do their own research or consult a professional advisor.

Tony Cross

Tony Cross

Tony Cross is a market commentator with over 15 years of experience, producing compelling, insightful copy for journalists and investors alike. Focusing on macroeconomics, UK blue chip equities and inter market analysis, Cross's commentary is well regarded for its clarity and ability to cut through the waffle. He has been quoted in publications as diverse as The Financial Times, The Times, The Guardian and The Sun. He has also been a regular guest on both Share Radio and TipTV.

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