The Reserve Bank of Australia (RBA) and Swiss National Bank (SNB) are both in action this week; one may hold and the other could be ready to do a bumper 50-basis-point (bps) rate cut. US PCE inflation data should let the market know whether the Federal Reserve has its finger on the pulse. The week starts with the monthly round of global manufacturing and services PMIs.

Here are the week’s key events:

Monday, September 23^rd: Flash PMI surveys

The focus at the start of the week is on the regular round of flash PMI surveys from around the world. Germany’s economic performance is particularly under the microscope after a steady run of poor data culminated in further deterioration in August. The HCOB final Purchasing Managers’ Index (PMI) for German manufacturing fell to 42.4 in August from 43.2 in July. Also keep an eye on the French data to see whether its bump in services activity can be sustained beyond the Olympics. Flash manufacturing and services surveys covering the UK and US are also due out.

Tuesday, September 24^th: RBA meeting

The Reserve Bank of Australia (RBA) will cut rates at some stage in the near future, but perhaps not at this meeting. Although policymakers ought to be apprised of the monthly inflation report due on Wednesday, they may prefer to wait for the quarterly CPI report, which is due on October 30th, before taking action. Whilst inflation slowed to 3.5% in July it is still above the top of the RBA’s 2 – 3% target band, whilst the jobs market remains strong.

RBA governor Bullock has said that “if the economy evolves broadly as anticipated, the board does not expect that it will be in a position to cut rates in the near term”. However, sticky inflation suggests they will wait a little while longer to begin easing. The median expectation is for a 25bps rate cut in Q1 of 2025. The question is whether the jumbo Federal Reserve rate cut last week prompts them to act sooner. If the RBA holds fire as the Fed cuts, we could see further Australian dollar appreciation. Elsewhere, the German Ifo business climate report and US Conference Board consumer confidence survey are due out.

Wednesday, September 25^th: Australian inflation data

A light day for economic data. Australian CPI inflation kicks off the session but comes after the RBA decision so may not be as market-moving as usual. New home sales in the US are also worth keeping an eye on. The main event could be the weekly US crude oil inventory data. Prices have bounced off the September 10^th lows, but crude still works as a proxy for broader risk assets and recession fears.

Thursday, September 26^th: Swiss National Bank meeting

The Swiss National Bank became the first major central bank to reduce interest rates when introduced a 25bps cut in March. Since then, a sharp rally in the Swiss franc and low inflation has led to expectations the SNB may need to conduct a jumbo rate cut this week. MUFG, UBS and BofA are among those who think the central bank ought to cut by 50bps in order to contain CHF strength.

Meanwhile, there is a lot of US data to watch. Final GDP figures for the second quarter are expected to show growth at 3%, whilst market participants will also be watching weekly unemployment claims, durable goods and the final GDP price index.

Friday, September 27^th: US PCE Inflation

Some inflation data out of Japan should set the tone for the Asian session, with traders eyeing whether the latest Tokyo core CPI has anything to move the needle on the yen or the next steps for the Bank of Japan.

Spanish flash CPI inflation and Canadian GDP is also out but the main event in the North American session is the core PCE price index. In the wake of last week’s rate cut by the Fed, this is the first glimpse of whether inflationary pressures are receding as much as the central bank hopes.