September non-agricultural fixed FED decision! Major events and data outlook of the week from October 4th to 10th

In the week of October 4-10, the US September non-agricultural employment report will be released. This will be the last employment report received by the Federal Reserve before its November policy meeting to determine whether it will start the process of reducing debt purchases in November. In addition, Canada will also publish employment data. China will publish data on foreign exchange reserves and social financing levels.

In terms of events, the Reserve Bank of Australia and the Reserve Bank of New Zealand will successively announce new interest rate resolutions. After two months of postponement, the Reserve Bank of New Zealand is expected to fire the first shot of interest rate hikes by central banks of major developed countries in the world, and is expected to raise interest rates again in November. OPEC+ will hold a ministerial meeting, and oil-producing countries may raise the current monthly production increase target of 400,000 barrels per day.


Monday (October 4), Tuesday (October 5) Keywords: Eurozone investor confidence, OPEC+ ministerial meeting, RBA resolution, US ISM non-manufacturing PMI, API inventory


Sentix investor confidence in the Eurozone fell for the second consecutive month in September. Manfred Huebner, managing director of Sentix, said: “The economic recovery has reached its peak after the COVID-19 lockdown measures were relaxed. The question now is whether the rebound will take a breather or start to go downhill again.”

All eyes in the market are now on the meeting of the Organization of Petroleum Exporting Countries and Russia-led partners (OPEC+) to be held next Monday (October 4). In addition to the 400,000 barrels per day in November and December promised by the existing agreement, oil-producing countries are expected to discuss other options.

Four OPEC+ sources said that it is possible to further increase oil production, but no one gave a specific amount or specific month. Another OPEC+ source said that there may be an increase of 800,000 barrels per day in the next month, and there may be no increase in production in the next month.

It is not clear what caused this change in tone, but before that, OPEC+ Joint Technical Committee (JTC) held a meeting to assess the market prospects, and it is expected that under its basic scenario forecast, the oil market will appear 140 next year. The surplus of 10,000 barrels per day is slightly lower than the previously predicted surplus of 1.6 million barrels per day. In July of this year, OPEC+ agreed to increase its daily output by 400,000 barrels from August, and confirmed the plan at its last meeting on September 1.

Prior to the OPEC+ online meeting on October 4, negotiations between member states were still continuing, and there was no guarantee that they would agree to additional production. Sources from oil companies in Nigeria and Angola, Africa’s largest oil exporters, warned that due to insufficient investment and thorny maintenance issues that continue to hinder output, these two countries will have difficulty increasing their output to OPEC’s quota level until at least next year. . This problem reflects that some oil-producing countries are now unable to increase production capacity to meet the soaring global fuel demand accompanying the economic recovery.

Investment bank Goldman Sachs pointed out that potential new virus variants may drag down demand, and the Organization of Petroleum Exporting Countries and oil-producing allies (OPEC+) actively speeding up production may weaken its supply gap forecast. These are key risks to its bullish outlook. .

The minutes of the Reserve Bank of Australia’s September policy meeting show that the Reserve Bank of Australia is worried that once the anti-epidemic lockdown begins to relax, the spread of the Delta mutant strain may slow the economic recovery, although the central bank still expects the economy to resume strong growth next year. The committee is considering postponing plans to reduce the bond purchase plan by 1 billion Australian dollars (727 million US dollars) to 4 billion Australian dollars per week.

RBA Assistant Governor Bullock warned that Australia's hot housing market is leading to rising consumer debt, which may pose risks to financial stability; but she also pointed out that a strong housing market is beneficial to the overall economy.

The International Monetary Fund (IMF) warned last week that Australian authorities need to tighten mortgage standards to cool the hot real estate market and reduce risks to the financial system, while also calling for more action on climate change.

The unexpected increase in retail sales in the United States in August alleviated concerns about a sharp slowdown in economic growth. In August, service industry activity increased moderately, but there are preliminary signs that supply constraints and price surges have begun to fall, suggesting that even if economic growth slows down this quarter It will also be temporary.

Wednesday (October 6) Keywords: New Zealand Federal Reserve Resolution, American ADP, EIA, Bostic


New Zealand’s GDP in the second quarter increased by 2.8% from the previous quarter and 17.4% year-on-year. The outside world generally believes that the Reserve Bank of New Zealand is likely to start raising interest rates next week and raise interest rates again in November. The Reserve Bank of New Zealand has very firmly embarked on the path of tightening monetary policy.

The Reserve Bank of New Zealand was expected to become the first central bank of a major developed country to raise interest rates in August. However, in the middle of the month, a confirmed case of local transmission of new coronary pneumonia was found in Auckland, New Zealand's largest city, and the Reserve Bank of New Zealand had to delay raising interest rates.

U.S. crude oil, gasoline and distillate stocks rose last week as production resumed after the recent storm. As of the week of September 24, US EIA crude oil inventories increased by 4.578 million barrels to 418.5 million barrels. The market is expected to decrease by 2.15 million barrels; gasoline and distillate inventories also increased by 384,000 barrels and 193,000 barrels, respectively.

U.S. crude oil production jumped 500,000 barrels per day to 11.1 million barrels per day, which was in line with the level before Hurricane Ida hit the U.S. Gulf of Mexico about a month ago. Analysts believe that weekly production data is not as reliable as monthly data, and the release of monthly data is lagging behind.

Atlanta Fed President Bostic said this week that the US labor market is in a state of "chaos," when people return to work, they have to deal with family responsibilities, companies are turning to automation during labor shortages, and the COVID-19 crisis continues.

Thursday (October 7) Keywords: China Foreign Reserves, U.S. Preliminary Request, Lien


According to Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, China’s foreign reserves have remained stable above the 3.2 trillion mark for four consecutive months in August. The RMB exchange rate will remain basically stable during the year, and the domestic stock and bond markets will still have a strong interest in foreign investment. Strong attractiveness, multiple factors will continue to support the scale of foreign reserves to remain basically stable.

Wang Chunying emphasized that China has continued to consolidate and expand the results of epidemic prevention and control and economic and social development, China's economy has maintained a stable recovery, and the quality of development has continued to improve, all of which are conducive to maintaining overall stability in the scale of foreign reserves.

The number of first-time jobless claims in the United States has unexpectedly increased for three consecutive weeks, which may reflect the deterioration of labor market conditions and the high volatility of this weekly data. The rise in the number of first-time jobless claims may highlight the fluctuations in the weekly data, as employers are eager to hire more employees and be able to retain existing staff. However, the number of people applying for unemployment benefits for the first time is still hovering near the low point since the epidemic.

The British "Financial Times" reported in mid-September that the European Central Bank chief economist Lien revealed in a private meeting with German economists that the European Central Bank expects to reach the 2% inflation target by 2025. The European Central Bank has not disclosed this long-term forecast, and Lien’s speech may be used to infer the future path of interest rates.

Friday (October 8) Keywords: China Caixin Service Industry PMI, China Social Finance, U.S. non-agricultural, Canadian employment


China's service industry supply and demand contracted to varying degrees in August, as the rebound of the epidemic affected the normal production and operation of the service industry. However, with the effective control of this round of the epidemic and the approach of Mid-Autumn Festival and National Day holidays, companies are more optimistic about the recent recovery of the service industry market.

China's social financing is expected to stabilize in September, and the growth rate of credit, social financing and M2 will all enter a slight rebound in the fourth quarter. In the context of my country's ample room for monetary policy, the policy side will move accordingly. In the future, policy tools such as comprehensive RRR cuts, re-lending and rediscounting, and MLF operations have room for effort.

Fed Chairman Powell said that the U.S. economy is still far from achieving full employment, and full employment is a key component of the Fed’s threshold for raising interest rates. This adds to the weight of the September non-agricultural employment report to be released on October 8. The data may show whether the impact of the new crown Delta variant is deeper than Fed officials expected earlier in the summer.

Powell also said that resolving the "tension" between high inflation and high unemployment is the most pressing issue currently facing the Fed, acknowledging that these two goals may conflict. As the U.S. economy recovers from the epidemic, rising prices and hiring difficulties may be "more persistent than expected," and the Fed will take action when necessary to deal with out-of-control inflation.

A JPMorgan Chase model predicts that September employment data will remain weak, as consumers seem to have cut travel and leisure spending since Labor Day. In predicting a sharp slowdown in U.S. job growth last month, JPMorgan Chase’s model is more accurate than almost all other forecasts.

The Canadian unemployment rate fell to 7.1% in August, but it is still high. According to a report released by the Bank of Canada recently, the full recovery of the Canadian economy will not fall to a low level until the end of this year or next year.

The Canadian employment situation currently presents a structural contradiction: on the one hand, the unemployment rate is still high, and on the other hand, there are a large number of vacancies in certain industries. Labor economist Jim Stanford believes that the key problem in the Canadian labor market is underemployment, not high unemployment.

The profound impact of the new crown epidemic on the Canadian labor market is the weakening and loss of labor skills. Bank of Canada Governor McCollum believes that the epidemic has caused many people to be unable to work for a long time, and the skills they possess will gradually lose value. Many companies complain that they cannot recruit qualified workers and cannot pay full remuneration for these positions.