Thinking of serving: the central bank is in the spotlight
In the round of next week the central bank meeting, we sought a 25bp cut from the Federal Reserve and the Bank of Canada. Meanwhile, the Bank of England must reach the break, although further loosening instructions will be strictly monitored
Think in the future in the advanced market
United States (James Knightley)
Decision Level (Wednesday): The focus is at the Federal Reserve meeting on Wednesday. While inflation continues to increase, the number of jobs looks worse and worse. There has been limited work growth that was seen over the past four months, and the latest data revisions show more than half of the reported jobs have been added in 12 months until March found not true! The cooling economy and the weakening of the job market will help reduce inflation associated with tariffs, and The Fed is now in a position to continue the policy of loosening from the area “rather limiting” to neutral foothold. We are looking for a 25BP level cutting at a rate to 3.25% in March from the current level of 4.5%.
Retail Sales (Tue): In terms of data, retail sales will be detained by calm consumer sentiment and decreased car sales. Industrial production can contract again based on manufacturing survey evidence.
United Kingdom (James Smith):
Job Report (Tue): The job market is a wild card for the Bank of England, and we will oversee further weaknesses in the payroll number. The latest survey has improved, which temporarily shows the worst is behind us for the job market, but this is the main risk towards autumn. We will also look for confirmation that wage growth will fall.
Inflation (Wed): Boe is very sensitive to food inflation today, and this is regulated to notes above 5%. Inflation services must be lower inch. If we are true, then this report should not be materially transferred in the bank of England tariff deduction route. We still hope that the November interest rate cuts, although a big reverse surprise in inflation will be a catalyst for us to change our minds about it.
Bank of England (THU): Interest rate cutting is never possible to occur at this meeting, given Boe’s preference for slaughtering interest rates per quarter once, and has done so in August. We doubt that the bank will fundamentally change its guidelines as well, which, although it indicates further cutting, shows the tariff closer to neutral.
Canada (James Knightley)
Tariff decisions (Wed): Canadian banks are widely expected to cut interest rates of 25bp. Canadian economy is very exposed to US US President Donald Trump, and output contracts sharply in the second quarter while work drops for the second month in a row in August, encouraging unemployment up to 7.1%. Inflation is broad in line with the target, so the BOC has space to move the level closer to the lower end of the “neutral range” felt. We think it will cut once again in the fourth quarter.
Think in the future in Central and Eastern European
Poland (Adam Antoniak)
CPI (THU): The last August CPI must be close to the estimated flash 2.8% year-to-year. Detailed data must allow the calculation of more precise core inflation, which, according to our estimate, is moderated to 3.0-3.1% yoy from 3.3% yoy reported in July. The decline in headlines and core inflation is the main reason for a series of interest rates by the National Poland National Bank (NBP), which has reduced the referral level as far as 100bp so far. Policy makers are more careful here because of the lower rates, and we may need to wait until November sitting to cut other 25BP tariffs.
Industrial Output (THU): Since the German economy remains unemployed, the production of the Polish industry in general is stagnant in the last quarter. August is a traditional month of production rest in the automotive industry, and the calendar is not profitable (with less working days than in August 2024), so that a strong positive amount in annual terms will be a positive sign. PPI also remains in the deflation area last month. The Polish economy continues to develop behind the service sector.
Labor Market Report (Thu): Wage growth continues to subside, although gradually, because the labor market remains tight even though there is a cooldown in the demands of workers. However, structural tension (worsening demographics and decreased labor supply) dominates the cycle factor. Work continues the decline trend. Domestic gauge of unemployment increased rather, but a broader labor force survey (LFS) detailed the decline of nearly 100,000 people in the number of unemployment in the second quarter of 2025. The unemployment rate of LFS in Poland remained between the lowest in the European Union.
Czech Republic (David Havrlant)
PPI (Tue): Industrial producers’ prices are likely to be still in annual decline in August, reflecting the weakening of the price of Brent crude oil and strengthening Koruna against dollars and a single currency in July and August. Reduction of costs for all imports is regulated to consider the price of producers despite the start of the gradual recovery in the Czech Manufacturing.
Armenia (Dmitry Dolgin)
Tariff Decision (TUE): We hope that the Armenian central bank (CBA) keeps the financing rate again not changed by 6.75% at the upcoming council meeting on September 16. The cutting cycle has been detained since February due to global uncertainty and fiscal easing, which has a risk to CPI trends despite strong drames and slowdown in economic activities. Inflation took up to 3.6% yoy in August, exceeding our expectations and made the cutting less likely.
Source: Ing
