Central Bankers Hit Speaking Circuit Amid Splits: Economy Week

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Central bankers are starting to feel their way as some parts of the world economy show signs of stabilizing after they cut interest rates.

With Federal Reserve and European Central Bank officials divided over the outlook for their economies and benchmarks, their public appearances will be scrutinized even more closely than usual by investors. Also occupying the attention of traders will be the Fed’s effort to pull back surging money market rates.

Here’s what happened last week and below is our weekly wrap of what’s going on in the world economy this week.

U.S. and Canada

New York Fed President John Williams, who has been trying to restrain those market rates, will speak on Monday, as will St. Louis counterpart James Bullard, who last week sought a deeper interest rate cut than colleagues. San Francisco’s Mary Daly also speaks that day, while Charlie Evans of Chicago, Robert Kaplan of Dallas and Kansas City’s Esther George talk later in the week.

Governor Rich Clarida pipes up on Thursday as does Neel Kashkari of Minneapolis. Patrick Harker of Philadelphia and Vice Chairman Randy Quarles wrap up the week.

Data will also be monitored to see if recent signs of strength hold up. IHS Markit releases its flash purchasing managers index on Monday, consumer confidence comes Tuesday and durable goods orders land Friday.

• For more, read Bloomberg Economics’ full Week Ahead for the U.S.

Europe, Middle East and Africa

European Central Bank President Mario Draghi’s valedictory appearance at the European Parliament takes place on Monday. Because of his imminent departure, any signals on future stimulus might be limited in value.

Britain’s budget deficit will swell as an overhaul of official data due on Tuesday shows the real cost of student loans to the state. The shift changes the landscape for the chancellor because it may thwart him in his quest to end austerity next year without breaking a key fiscal rule. Hungary and the Czech Republic are expected to keep rates on hold. Germany’s Ifo survey on Tuesday will be studied to see if Europe’s largest economy is heading into recession.

Central banks in Kenya and Angola will probably keep rates on hold next week, after the attack on a Saudi Arabian oil facility brought more uncertainty about fuel prices and inflation, giving them one more reason to stay on the sidelines of the global monetary-easing parade.

Egypt could cut once again on Thursday, with analysts expecting about 150 basis points of easing by year-end. Morocco, where the benchmark is at a record-low 2.25%, may remain on hold; the central bank hasn’t cut since 2016 despite taking an increasingly negative view of the nation’s economic trajectory.

• For more, read Bloomberg Economics’ full Week Ahead for EMEA

Asia

Bank of Japan Governor Haruhiko Kuroda speaks on Thursday a week after he and colleagues signaled they may be prepared to ease monetary policy in October.

Thailand and the Philippines are set to cut rates on Wednesday and Thursday, respectively, but New Zealand may stay on hold on Wednesday. As for data, the main release in China is industrial profits on Friday, which Bloomberg Economics sees slowing amid weakening production. Hong Kong’s exports and imports probably declined in August as the China-U.S. trade war continues to depress overall trade.

• For more, read Bloomberg Economics’ full Week Ahead for Asia

Latin America

After the Brazilian central bank signaled it’s contemplating a longer and deeper monetary easing cycle, investors on Tuesday will dissect the minutes of the its rate-setting meeting to gauge potential obstacles for future rate cuts.

On Thursday, Mexico may lower interest rates for a second time in two months as inflation slows and the economy stalls. Colombia, on the other hand, is expected to keep its benchmark unchanged at 4.25% on Monday as inflation hovers just below the top of its 2%-to-4% range.

• For more, read Bloomberg Economics’ full Week Ahead for Latin America

To contact the reporter on this story: Simon Kennedy in London at skennedy4@bloomberg.net

To contact the editors responsible for this story: Stephanie Flanders at flanders@bloomberg.net, Fergal O'Brien

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