Next Week News Today: More Volatility?

Next week brings the possibility of another seven days to scare ourselves witless, thanks to the swathe of economic numbers that are set to hit the newswires.

If you haven’t already figured it out, China is in the initial stages of rebalancing its economy. It no longer wants to be the low-cost workshop of the world. It wants to be taken seriously as a nation of consumers. Consequently, manufacturing data is less relevant today than it was a few years ago.

But a big song and dance could be made of the NBS and Caixin Manufacturing PMI data for September next week. A reading of below 50 on Thursday will be seen as bad news by those who haven’t yet twigged that manufacturing is no longer that important, anymore.

Perhaps a more important measure could be the China General Services PMI. This tracks sales, employment, inventories and prices, which is probably a better measure of where China is heading. A reading above 50 could indicate that the services sector in China is expanding.

Turning to the West, the US will report personal spending for August on Monday. Consumer spending accounts for around three quarters of economic activity in the US. It is also a key driver of growth. So an increase in personal spending could provide more clues on the timing of a rate hike by the Federal Reserve. The US consumer confidence reading on Tuesday could also be key.

August retail sales numbers are also expected from Japan. Over the last four months, consumers have returned to the shops, following the 9.7% plunge in March. Another positive reading could provide a much-needed boost for Prime Minister Shinzo Abe and his Abenomics masterplan.

Meanwhile, talk of a possible recession that Singapore could resurface if Manufacturing PMI on Thursday shows further signs of weakness. The reading of below 50 in both July and August indicated that the manufacturing sector in Singapore was shrinking.

And finally, Thursday marks the start of the Golden Week holiday in China. The Shanghai Stock Exchange will be closed from 1 October to 7 October.

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