The central bank's decision is "three lacks and one"! Major events and data outlook of the week from September 6th to 12th

In the week of September 6-12, the Reserve Bank of Australia, the Bank of Canada and the European Central Bank will successively announce new interest rate resolutions. The Federal Reserve will publish the Beige Book, and as usual, many officials will speak publicly after the non-agricultural announcement. In terms of data, the focus is on: China's trade account, foreign reserves, social financing and inflation, Canadian employment, etc. What needs to be reminded: Because it coincides with Labor Day, this week's US crude oil inventory data is postponed by one day.

Monday (September 6), Tuesday (September 7) Keywords: China Trade Account, China Foreign Reserves, Reserve Bank of Australia Resolutions

In the first seven months of this year, China’s total import and export value was 21.34 trillion yuan, a year-on-year increase of 24.5%, achieving 14 consecutive months of positive growth. Among them, exports were 11.66 trillion yuan, a year-on-year increase of 24.5%. Imports were 9.68 trillion yuan, a year-on-year increase of 24.4%. On the whole, this year my country's foreign trade has grown rapidly, stabilized rapidly, and stabilized and improved.

However, Minister of Commerce Wang Wentao admitted last month that we are still facing some difficulties, which are also commonly encountered internationally, such as the impact of transportation capacity and the rise of freight rates, the rise of commodities and raw materials, and the pressure of RMB exchange rate appreciation. These are the "four difficulties" encountered by foreign trade companies, especially for small and medium-sized enterprises. Therefore, a series of measures must be taken to stabilize market players and stabilize orders.

The domestic demand in China's economy has continued to recover, and the main economic indicators are within a reasonable range, supporting the stability of the scale of foreign exchange reserves. External demand is expected to remain relatively strong, China's foreign trade will continue to grow, and supply and demand in the foreign exchange market are expected to maintain a basic balance, which will help maintain a stable scale of foreign exchange reserves.

The minutes of the Reserve Bank of Australia’s August meeting show that if the nationwide epidemic blockade indicates that the economy is facing a more serious setback, the Reserve Bank of Australia will be prepared to take policy actions. With the spread of the Delta virus, this result now looks more and more likely, which has put pressure on the Reserve Bank of Australia to postpone the planned debt reduction and may even relax its policy.

The unemployment rate in Australia unexpectedly dropped to a 12-year low in July, but this was mainly due to the anti-epidemic lockdown measures restricting people's ability to find jobs and they withdrew from the labor force. Analysts warned that the real blow to jobs and the unemployment rate will become more apparent in the August and September data, confirming that the economy may shrink sharply this quarter.

More than half of Australia's population has now been affected by the lockdown, and the closure of retail and service industries has greatly restricted mobility. All of these will test the confidence of the Reserve Bank of Australia. The central bank firmly believes that once the blockade restrictions are relaxed, the job market will rebound quickly. The Reserve Bank of Australia is already under pressure to postpone its debt purchase plan and even further increase its stimulus.

Wednesday (September 8) Keywords: China Social Finance, Bank of Canada Resolution, API, Fed Beige Book, Williams

In July 2021, China's social financing scale increased by 1.06 trillion yuan, 636.2 billion yuan less than the same period last year. Mainly related to sporadic cases in a few places in the country. However, from the perspective of internal and external environments, sporadic cases will not change the steady operation of my country's economy. At present, my country’s vaccination is over 1.8 billion doses, coupled with rich experience in epidemic prevention and rapid progress in vaccine research and development, the risk of domestic sporadic cases is controllable; domestic underpinning policies remain flexible, and proactive fiscal policies in the second half of the year must improve policy effectiveness and a stable currency Policies should maintain reasonable and sufficient liquidity, provide a moderate monetary and credit environment for the stable operation of the economy, unblock policy transmission, guide financial institutions to increase support for key and emerging areas such as small and medium-sized enterprises, manufacturing, etc., stimulate the vitality of micro entities, stabilize employment, and promote domestic demand .

The Bank of Canada announced in April that it would reduce its bond purchases. In July, it lowered its weekly net bond purchase target from 3 billion Canadian dollars to 2 billion Canadian dollars (1.6 billion U.S. dollars). The Bank of Canada this year is expected to further reduce its bond purchase program, paving the way for a rate hike by the end of 2022. The Canadian benchmark interest rate is currently at a record low of 0.25%.

Thursday (September 9th) Keywords: Chinese inflation, De Bell, European Central Bank resolution, Lagarde, U.S. preliminary request, EIA, Daly, McCallum

As the supply of live pigs continues to be repaired, the decline in pork prices has expanded again, and the downward trend in food prices may continue. During the year, China’s CPI is likely to maintain a moderate trend. The inflation level is generally controllable, and the overall impact on monetary policy is limited.

The main task of the European Central Bank at its September 9 meeting will be to determine the pace of bond purchases in the next quarter. With the rapid economic rebound, some policymakers have put forward arguments for discussions on how the European Central Bank may end the 1.85 trillion euro pandemic emergency asset purchase plan (PEPP).

The inflation rate in the euro zone in August was a full percentage point higher than the 2% target level set by the central bank, and some officials were uneasy about the scale of the epidemic's debt purchase plan. Although the Fed’s rationale for high inflation as a temporary factor also applies to the European Central Bank, some hawkish officials have also made their own voices.

European Central Bank Deputy Governor Luis de Guindos said that after the recent announcement of stable economic activity indicators in the third quarter, the European Central Bank may again raise its macroeconomic forecasts for the euro zone in September. The European Central Bank Management Committee and Austrian Central Bank Governor Holtzman advocated reducing PEPP before the end of the year.

However, the European Central Bank’s chief economist Lien warned last week that after a strong second quarter, more and more resistance may limit expansion. “It looks like the bottleneck will last longer than expected, and the world economy also has The slowdown is natural. The Delta variant, although its impact is more limited than previous waves of infection, is still a resistance."

Lien said that the stimulus plan will last at least until the end of March, and it is too early to start discussions. Even if it ends on time, the inflation rate will inevitably still be below the ECB’s 2% target, so the central bank will have to maintain some asset purchases through another plan. This means that the market does not need to be notified in advance.

He said: “No matter when PEPP may end, in terms of quantitative easing, this is not the end of the role of the European Central Bank. That’s why we don’t need a long time to think about this issue. We already know what to do before March, That is to maintain favorable financing conditions, so we have time this fall to figure out what actions we need to take next."

The rise in the number of new cases may dampen U.S. demand in the coming weeks, and there will also be a seasonal decline after the summer driving season ends. The U.S. Energy Information Administration (EIA) said that the supply of refined oil used to measure demand exceeded 22 million barrels per day for the first time in history.

Friday (September 10) Keywords: Canadian employment, Mestre

Canada's employment growth slowed more than expected in July. Economists predict that employment will continue to grow in the future, but as the employment rate approaches pre-pandemic levels, the growth rate will be even slower. The Canadian employment rate is still 1.3% below the February 2020 level.

Royce Mendes, senior economist at CIBC Capital Markets, said that coupled with the strong growth in June, the Canadian economy has now recovered all the jobs lost during the third wave of pandemic. Many employers report labor shortages due to concerns about the virus and childcare responsibilities, so the growth rate may slow down."

U.S. Cleveland Federal Reserve Chairman Meester said this week that the U.S. economy is recovering strongly, but she still does not believe that the recent inflation readings are sufficient to achieve the price stability target adjusted by the Fed a year ago.