Heavy week is coming! The U.S. PCE data is on track to be released, with speeches from Fed officials taking turns, and several central banks may join the rate-cutting trend.

This week, global financial markets will welcome many important data and blockbuster events. The Fed's favorite price indicator slowing down and strong consumer demand will support the Fed's decision to significantly cut interest rates and Fed Chairman Powell's view that the economy remains strong. Economists expect the US August PCE price index, to be released on Friday, to rise by only 0.1% month-on-month for the second time in three months. This inflation indicator may increase by 2.3% compared to the same period last year, which is the smallest annual increase since early 2021, slightly above the Fed's 2% target. The slowdown in inflation compared to the same period last year reflects a drop in energy and food prices, as well as a slowdown in core costs. Economists expect the PCE price index excluding food and fuel to rise by 0.2% for the third consecutive month. The decrease in inflation pressure earlier this year provided enough confidence for Fed policymakers to lower interest rates by 50 basis points on September 18th. This was the first rate cut in over four years, representing a shift in Fed policy to avoid worsening labor market conditions. Investors will pay attention to speeches from several Fed officials in the coming week. On Thursday, Fed Chairman Powell will give opening remarks via pre-recorded video for an event. Additionally, Fed Vice Chair Michelle Bowman, Adriana Kugler, Lisa Cook, as well as regional Fed presidents Raphael Bostic and Austan Goolsbee will participate in various events. August inflation data will be released along with personal spending and income data, and economists predict that US household spending will increase significantly again. Continued growth in consumer spending helps to increase the likelihood of continued economic expansion. Other closely watched US economic data include August new home sales, second-quarter GDP, weekly initial jobless claims, and August durable goods orders. Canada's GDP data for July and preliminary data for August are expected to show weak growth in the third quarter, possibly below the Bank of Canada's annualized growth estimate of 2.8%. Meanwhile, Bank of Canada Governor Tiff Macklem will speak at a banking conference in Toronto. In addition, the Organization for Economic Cooperation and Development (OECD) will release new economic forecasts on Wednesday, while the central banks of Switzerland and Sweden are expected to cut rates, and the Australian Reserve Bank is likely to keep rates unchanged. Several central banks will announce rate decisions this week. Here are the significant events the financial markets will face this week: Asia It is expected that the Reserve Bank of Australia will keep the cash rate unchanged at 4.35% on Tuesday, with the focus potentially on whether RBA Governor Michele Bullock will maintain her hawkish stance after strong employment data reduced traders' bets on a rate cut in December. Bloomberg Economics still believes that the RBA may ease monetary policy in the fourth quarter. Australian authorities will have to wait until Wednesday to see if inflation in August cools for the third consecutive month. Australian Treasurer Jim Chalmers said on Sunday that he expects the upcoming data to show encouraging progress in combating inflation in Australia, but he acknowledges that the RBA may not be ready to cut rates this week. Other countries releasing the latest inflation data include Malaysia and Singapore, with expectations of a slowdown in price increases in both countries in August. Japan will release new inflation data on Friday, with expectations that the September Tokyo CPI will exceed the Bank of Japan's target of 2%. Australia and India will release the September Purchasing Managers' Index (PMI) on Monday, followed by Japan on the next day. Europe, Middle East, Africa Four central banks in Europe will announce rate decisions, with investors possibly questioning whether decision-makers are interested in following the Fed's footsteps in cutting rates by 50 basis points. The Swiss National Bank will announce its rate decision on Thursday. While most economists expect the bank to cut rates by 25 basis points, observers believe that with the Swiss franc continuing to strengthen, the significant rate cut by the US increases the possibility of the Swiss National Bank cutting rates by 50 basis points. This is the last meeting for Swiss National Bank President Thomas Jordan, whose term ends at the end of this month. The Swedish Riksbank will announce its rate decision on Wednesday. The market expects the bank to cut rates by 25 basis points for the third time this year, bringing the rate to 3.25%, and outlining a further path for rate cuts. The current guidance is to raise rates two to three times in 2024 - including on Wednesday. Policymakers from the Swedish Riksbank talked about a 50 basis point rate cut at the last meeting, but most economists believe that the bank is more likely to wait until November to take more substantial rate cut action. Meanwhile, in Eastern Europe, the Hungarian central bank may cut rates by 25 basis points on Tuesday, while the Czech central bank may do the same on Thursday. The euro area and the UK will release preliminary September PMI on Monday, reflecting the state of private sector activity at the end of the third quarter. Due to concerns about the weak German economy, the Ifo Business Confidence Index to be released on Tuesday will be a focus, and on the same day, German Bundesbank President Joachim Nagel will speak on the economy. German economic institutions will publish new forecasts on Thursday. French data will be closely watched by investors and the country's new Finance Minister Antoine Armand. The PMI index in the Eurozone's second-largest economy received a boost from the Olympics in August, but this effect is expected to fade this month. Consumer confidence index will also be released. Investors will also pay attention to the September inflation data for France and Spain to be released on Friday, which will hint at the overall inflation results for the Eurozone to be released next week. Economists predict that inflation rates in these two countries will drop below 2%. In addition to Nagel, six other Eurozone policymakers are planning to speak, including European Central Bank President Christine Lagarde, Chief Economist Philip Lane, and Spain's new Central Bank Governor Jose Luis Escriva. In Africa, the Central Bank of Nigeria may pause its tightening policy on Tuesday, while the Central Bank of Morocco may cut rates.The rate is maintained at 2.75%, and in southern Africa, Lesotho may keep borrowing costs at 7.75% as inflation remains high.Latin America The minutes of the September meeting of the Brazilian Central Bank and the quarterly inflation report will be the focus. After raising interest rates by 25 basis points to 10.75% on September 18, the minutes of the meeting may provide a more detailed policy roadmap. The market expects the Brazilian Central Bank to increase its forecasts for inflation, key interest rates, and GDP growth. Employment data to be released this week may show that the Brazilian labor market is still at historically tight levels, while mid-month inflation rates may have stagnated near the top of the Brazilian Central Bank's target range. Argentina is expected to release its GDP proxy data for July, which may support the following view: the Argentine economy has passed through the worst of 2024 and is beginning to recover in the second half of the year. In Mexico, a slowdown in domestic demand may lead to weak retail sales data again, and mid-month inflation data is unlikely to provide sufficient reason for policymakers to cut interest rates or keep them unchanged at the upcoming meeting of the Mexican Central Bank in a few days. The market expects Mexico to cut interest rates by 25 basis points to 10.5%, although some analysts believe that a 50 basis point cut may be possible to stay in sync with the Federal Reserve.