Below are the most important global events likely to affect FX and bond markets in the coming week starting Sept. 23.
After the U.S. Federal Reserve's large 50 basis-point interest-rate cut, attention switches back to economic data--particularly PCE inflation figures--for indications on how fast rates will fall from here.
In Europe, provisional purchasing managers' data for the eurozone and the U.K. will attract attention, alongside a rate decision in Switzerland.
In Asia, the spotlight is on the Reserve Bank of Australia as it meets ahead of key inflation data. Other events include an inflation print in Japan and industrial profit data for China.
U.S.
The Federal Reserve went big as it started cutting interest rates, opting for a half-point reduction at its September meeting. Upcoming data showing how fast inflation is falling and how much the economy is slowing will now be key to determining expectations for future rate cuts.
Most analysts expect two further rate cuts in November and December, and money markets are pricing in a high risk that one of them will be another large 50 basis-point reduction.
However, Fed Chair Jerome Powell made it clear that the Fed will respond to incoming information, Eric Winograd, director for developed market economic research at AllianceBernstein, said. The central bank "can move more aggressively if it becomes necessary," Winograd said in a note.
Analysts at UniCredit Research, however, said Powell made it clear that the recent 50 basis-point rate cut "did not represent the new pace."
Friday's U.S. PCE inflation data--the Fed's preferred measure of inflation--for August will likely be the most closely-watched item over the coming week.
This data should support the view that inflation is "under control," analysts at SEB said in a note.
The third estimate of U.S. second-quarter gross domestic product is also due on Thursday and the University of Michigan final consumer survey for September on Friday.
S&P preliminary purchasing managers' data on manufacturing and services for September on Monday and the Conference Board consumer confidence index for September on Tuesday will be watched for details on the recent performance of the economy.
Given the Fed's sharp focus on the jobs market, Thursday's weekly jobless claims figures will likely attract attention.
Other data of note include August durable goods data on Thursday, the Case-Shiller home price index for July on Tuesday and August new home sales on Wednesday.
The Treasury will auction $69 billion in two-year notes on Tuesday, $70 billion in five-year notes on Wednesday and $44 billion in seven-year notes on Thursday. It will also sell $28 billion in two-year floating rate notes on Wednesday.
CANADA
Canadian gross domestic product data for July are due on Friday.
The figures might be helped by recent stronger-than-expected retail sales figures for that month, said Olivia Cross at Capital Economics in a note.
Still, Canada's economy has looked weak of late. Recent minutes from the Bank of Canada showed officials might be willing to accelerate the pace of rate cuts should weakness in the labor market persist and GDP growth disappoint.
MEXICO
Mexico's central bank announces a rate decision on Thursday, where it is likely to cut its policy rate by 25 basis points, according to analysts at Citi.
EUROZONE
Monday's eurozone provisional purchasing managers' surveys on private sector activity during September will be closely watched amid uncertainty over whether the European Central Bank will cut interest rates again in October following this month's bumper rate cut in the U.S.
The PMIs are expected to show the manufacturing sector still in the doldrums while the temporary boost to the services sector from the Olympics in Paris fades.
LBBW analysts expect the data to show overall composite eurozone activity still just above the 50 level, which marks the threshold for growth.
"From the ECB's point of view, this is unlikely to provide a sufficient argument to cut interest rates again at the October meeting," they said. But a composite reading below 50 would likely spark rate-cut speculation, the analysts added.
Other forward-looking surveys during the week include the closely-watched German Ifo sentiment survey for September on Tuesday, the German September GfK consumer climate survey on Thursday and eurozone September business and consumer surveys on Friday.
As far as the ECB rate outlook is concerned, trends in inflation are the most important. Given that, French and Spanish provisional consumer-price inflation figures for September on Friday could garner particularly close attention.
Unlike the U.S. Fed, which has a dual mandate of targeting employment as well as inflation, the ECB's focus is solely on inflation.
French inflation data will "give an early read on aggregate eurozone inflation which is due the following week," analysts at ABN Amro said in a note.
"We expect a significant decline in inflation, as lower oil prices feed through to petrol prices, and with services inflation also likely to cool as the Olympics impact unwinds," they said.
Other data include eurozone August money supply on Thursday, followed by German unemployment data for September and French August consumer spending on Friday.
Bond auctions include Belgium selling 2029- and 2033-dated conventional and 2039-dated green bonds on Monday.
Germany and Italy will both have two auctions. Germany will offer 4.5 billion euros in September 2026 Schatz on Tuesday and 3 billion euros in November 2030 Bund on Wednesday. Italy will conduct an auction for short-dated BTP and inflation-linked bonds on Wednesday, while its end-of-month auction on Friday should include BTPs and floating rate notes.
U.K.
In an otherwise quiet week for U.K. data, focus will center on the release of U.K. provisional purchasing managers' surveys on manufacturing and services sector activity during September.
The Bank of England left interest rates on hold this month and looks set for a slower pace of rate cuts than the Federal Reserve and European Central Bank given a more robust economy.
The PMI data are likely to show a steady rate of expansion in the manufacturing sector, representing "further clear outperformance vis-a-vis the eurozone, where manufacturers are finding the going decidedly tougher," Investec economist Sandra Horsfield said.
Services sector activity is also still expected to show growth but at a slower pace than last month as caution sets in ahead of the new government's budget in October, she said.
The U.K. Debt Management office plans the auction of November 2033 index-linked gilt on Tuesday and the auction of October 2031 gilt on Wednesday.
SCANDINAVIA
Sweden's Riksbank announces a decision on Wednesday, with another 25 basis-point interest-rate cut to 3.25% likely.
Analysts said there is a risk of a bigger 50 basis-point rate cut, particularly given a trend of slowing inflation, a weak Swedish economy and the U.S. Fed's cut.
"In any case, the new projected rate path will likely be lowered compared to June, signaling back-to-back cuts this year and a faster pace in 2025," Citi analysts said in a note.
Sweden and Norway will conduct bond auctions on Wednesday.
SWITZERLAND
The Swiss National Bank announces a decision on Thursday and is expected to opt for a third consecutive cut to the key policy rate of 25 basis points to 1.0%.
The strengthening of the Swiss franc since the previous meeting in June and the recent surprisingly weak data out of Germany, Switzerland's most important export market, are likely to sway policymakers at the central bank towards a rate cut, analysts at UniCredit Research said.
HUNGARY
Hungary's central bank announces a rate decision on Tuesday.
Analysts at UniCredit Research expect a 25 basis-point cut in Hungary's policy rate, from 6.75% currently, particularly given the central bank's sensitivity to moves in the Hungarian forint.
CZECH REPUBLIC
The Czech National Bank announces its interest-rate decision on Wednesday and is likely to deliver another gradual rate cut but sound cautious about future policy easing, ING analysts said in a note.
The reasons for a less restrictive monetary policy stance have "clearly accumulated" as the softening economic outlook calls for some support, the analysts said. "On the other hand, quickening core inflation and persistently strong pricing in the service sector, supported by still robust wage growth, require some caution," they said. In such a situation, a 25bp rate reduction looks likely, they said.
AUSTRALIA & NEW ZEALAND
Markets will keep an eye on a policy meeting of the Reserve Bank of Australia that runs from Monday to Tuesday, but a monthly inflation indicator on Wednesday will likely be the main focus.
Inflation is expected to have fallen back to within the RBA's 2% to 3% target range in August for the first time in more than two years.
The RBA is likely to play down the significance of the headline inflation result given that government rebates to ease the cost of living will be behind the expected fall.
The RBA will be watching core inflation instead, which is expected to be more elevated. Still, if the core rate falls to around 3.4% on year as expected by some economists, that will still be very good news for the central bank, confirming a downtrend in inflation and raising expectations that an interest-rate cut is on the horizon.
The RBA has said it won't necessarily wait until inflation is back in the range to cut rates, noting that there are significant lags associated with changes in monetary policy.
Financial markets are betting that there is an 80% likelihood of a cut before the end of the year. Economists think it will be delayed until 2025.
The RBA's policy meeting is likely to pass without much fuss, with the official cash rate remaining at 4.35% and the RBA's guidance highly cautious and focused on incoming data.