Aside from EMEA and Latam seeing a lot of 2Q GDP results next week, we're looking for Poland's planned 2019 deficit to make its way onto the budget balance sheet
The budget balance data should provide a strong reduction of the PLN 9.5bn surplus accumulated after June, as indicated by Deputy FinMin Leszek Skiba. A deficit in the central budget is an exception in July – historically there were rather limited changes this month. The most significant thing should be the structure of expenditures; a deficit could be a result of earlier payments of funds that are typically spent in the fourth quarter.
Moreover, the second GDP reading should confirm 5.1%YoY dynamics in 2Q. We expect a moderation of private consumption from 4.8% to 4.5%YoY, solid investment growth (closing in on 10%YoY) and modest net export surplus - approximately 0.1pp.
If you're looking for clues about central bankers' next steps, you're unlikely to find them at Jackson Hole. We don't expect to hear anything new from Fed Chair Jerome Powell at the annual economic symposium over the weekend. Still, data from Germany next week could provide insight into the ECB's next move
Markets will be closely scrutinising Fed Chair Jerome Powell’s comments at the annual get-together of central bankers at Jackson Hole this weekend, although we doubt there will be much new on offer. History tells us that the speeches tend to quite “high level” and academic, and generally offer few firm hints on the policy outlook.
So we doubt investors will glean much more on Powell's view of the recent escalation in trade tensions, the difficulties unfolding in emerging markets, or indeed his thoughts on President Trump’s recent comments about higher rates.
In any case, we still suspect the majority view of policymakers is that the current US economic momentum will continue to outweigh trade uncertainties – at least for now. We expect further rate hikes in September and December.
The Korean central bank policy meeting will be a non-event. China’s August PMI will reflect the first full month of the trade war impact, while India looks poised to post a GDP slowdown
The ongoing trade war with the US has put China’s high-frequency activity data under an intense spotlight. Next week's data includes industrial profits for July and the manufacturing and non-manufacturing Purchasing Managers Indexes (PMIs) for August.
The manufacturing PMI for August will reflect the first full month of the US-China trade war impact. The consensus is centred on our 51.2 forecast, unchanged from July, but the risk is tilted on the downside rather than upside.
Consistent with the Chinese stock market sell-off underway since the start of the year, industrial profit growth has slowed to 17.2% year-on-year in the first half of the year from 22% a year ago. This closely tracks the Li Keqiang index (the composite index of year-on-year activity growth, including growth in outstanding bank lending- Premier Li’s preferred gauge of the economy) which shows the slowdown continued in July (see figure).
Discover what ING analysts are looking for next week in our global economic calendars