Saxo Spotlight: Will US soft landing hopes continue to be bolstered? – Sep 4 - 8 Saxo Spotlight: Will US soft landing hopes continue to be bolstered? – Sep 4 - 8 Saxo Spotlight: Will US soft landing hopes continue to be bolstered? – Sep 4 - 8

Saxo Spotlight: Will US soft landing hopes continue to be bolstered? – Sep 4 - 8

Macro 8 minutes to read
APAC Research

Summary:  US labor market data last week has pushed back on Fed’s rate hike expectations, and near-term economic momentum will likely remain supported by one-off spending in Q3 before giving way to a pullback in consumer spending into the end of the year. Data-light week ahead with Labor Day holiday in US and Canada on Monday, but central bank meetings from Australia and Canada will be in focus early in the week. China stimulus measures have ramped up, and it remains to be seen if data disappoints and offsets the small uptick in sentiment coming through. Oil and metals also remain in focus with commodities coming back to life in late August.

US economic health check brings services PMI in focus

There was a deluge of economic data out last week, and while we had some signs of weakness, the NFP jobs data on Friday still remained strong, leaving markets confused and still on course for expecting a soft landing. This soft-landing narrative will however continue to be on test as more data is reported, and we expect further impact from the tightening cycle to become more evident in the coming weeks. This week’s key focus will be how the services side of the economy is doing, with ISM services data for August out this Wednesday. There are some signs that spending in the third quarter can remain supported by one-off items such as blockbuster Hollywood movies (Barbie and Oppenheimer) or large-scale live entertainment (Taylor Swift, Beyonce) events. However, the outlook for consumer spending in Q4 is starting to fade, especially if you consider the eroding pandemic savings or the end of student loan forbearances. Job market is also slowing, as evident in last week’s job openings, and wage pressures are likely to soften. Bloomberg consensus expects August ISM services to stay steady at July’s level of 52.7 despite these one-off spending items. A weaker-than-expected print, especially one below 50, could spark concerns about a slowing economy, further decreasing the possibility of another Fed rate hike in this cycle and weighing on the dollar.

China's economic snapshot - anticipated loan surge, inflation rebound, and trade moderation

The Bloomberg survey anticipates new Yuan loans in August to surge to RMB 1,100 billion, attributed to increased regulatory encouragement for banks to lend and favorable seasonal factors. Government bond issuance in August soared past RMB 1 trillion as local governments rushed to use up issuance quota, driving an expected substantial rebound in August's aggregate social financing data to about RMB 2.8 trillion, up from July's RMB 528.5 billion. Year-on-year growth in outstanding aggregate social financing is projected to slightly increase to around 9% in August.

Inflation forecasts based on a Bloomberg survey suggest a moderate rebound in August's CPI inflation to 0.2% year-on-year from July's -0.3%, supported by base effects and rising food prices. The PPI is expected to contract less at -2.9% year-on-year, compared to July's -4.4%, aided by a low base from the previous year and recovering domestic and global commodities prices.

The Caixin China PMI Services index is expected to decline to 53.5 in August from July's 54.1, following a 1-point drop in the official NBS Service PMI to 50.5. Despite weak export data in NBS and Caixin PMI reports, analysts in the Bloomberg survey anticipate a slower decline in China's August exports at -9.0% year-on-year, compared to July's -14.5%. Imports are expected to contract less as well, at -9.4% year-on-year in August, versus -12.4% in July.

Central banks of Australia and Canada may keep rates unchanged

Expectations from central banks are fairly clear cut now, with most expected to stay on hold as inflation is slowing and lagged effects of tightening are also starting to show in economic growth. As such, FX focus may turn to more than yield differentials and conversations around who will cut first will be center-stage from here. The Reserve Bank of Australia meets Tuesday and the Bank of Canada meets Wednesday. For the RBA, data on inflation and labor market has been tilting dovish. July CPI last week was at 4.9% YoY, the first sub-5% print since February 2022 and employment data for July was also weak. While there are expectations that inflation can see another spike into the end of the year, RBA’s comments to keep door open for further tightening may not be enough to support the AUD and focus will remain on China’s measures to support yuan and its economy. Likewise, Bank of Canada is expected to keep rates unchanged at 5% especially after Friday’s data showing Q2 GDP unexpectedly falling by 0.2% against the central bank’s expectations of 1.5% gain. The key thing to watch in BOC decision will be whether we get a hawkish hold or a dovish hold, with the latter likely fueling rate cut bets for H1 2024 and weighing further on CAD.

Japan’s labor cash earnings unlikely to prompt BOJ tweak calls

Japan’s wage data remains in focus with the Bank of Japan waiting to see wage pressures before considering any significant tweak in its monetary policy. July’s nominal and real wage growth will be reported this Friday, and expected to come in at 2.4% YoY and -1.4% YoY respectively from 2.3% and -1.6% respectively in June. June’s wage growth was below expectations despite the summer bonuses, and raised doubts if the underlying momentum in inflation is sustainable. Continued pressure on household budgets would give more reason to BOJ to maintain its accommodative monetary policy. Focus this week will also be on the auctions for 10 and 30-year Japanese government bonds (JGBs) after sluggish demand at the 2-year auction last week. While pressure on BOJ to tweak policy is rising again as it approaches the September meeting, the slide in Treasury yields may continue to give Bank of Japan some breathing room.

Commodities: Energy and metals regaining momentum

Energy markets saw a strong recovery last week, and focus for the upcoming week will likely again remain on supply tightness as demand is unlikely to show any immediate concerns, remaining supported by one-off factors as discussed above. Oil will likely get some support from Russia’s announcements, after Deputy PM Novak said that OPEC+ will unveil the “new main parameters” of the supply deal in the next week. It is expected that Russia may extend its September export reduction (300k barrels/day) into October, while Saudi Arabia is also expected to further extend its voluntary 1mn barrels/day production curb into October. There is no set timing for the announcement this week. Meanwhile, bets on further Fed tightening have also been coming off as labor data broadly cooled last week. This supports the outlook for precious metals like Gold and Silver, which will remain in focus again this week. China stimulus announcements are also ramping up, bringing Copper in focus.

Earnings this week:


Tue: Zscaler, Ashtead

Wed: Alimentation Couche, Swiss Life

Thu: Copart, Sun Hung Kai Properties, Sekisui House, Toro

Fri: Kroger


Key economic events this week:

MON: US & Canadian Labour Day; German Trade (Jul), Swiss GDP (Q2), EZ Sentix (Sep)

TUE: RBA Policy Announcement; Final Composite & Services PMIs (Aug), EZ Producer Prices (Jul), US Factory Orders (Jul)

WED: BoC Policy Announcement; German Industrial Orders (Jul), EZ & UK Construction PMIs (Aug), US ISM Services PMI (Aug), Canadian Trade Balance (Jul)

THU: China Trade Balance (Aug), Swiss Unemployment (Aug), German Industrial Output (Jul), EZ Final Employment & Revised GDP (Q2)

FRI: Japanese Revised GDP (Q2), German Final CPI (Aug), Canadian Labour Market Report (Aug)

SAT: China CPI and PPI (Aug)

Anytime from Friday to Next Week: China Aggregate Social Financing & Loans (Aug)

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 07

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article
  • The rise of populism: Far-right parties will influence the future

    The disheartening cycle of unresolved geopolitical conflicts, the rise of polarizing political parties, and the stagnation of productivity.

    Read article
  • Investing in China: Navigating Q1 amid economic challenges

    Understand China's political landscape in Q4 2023 and the impact on counter-cyclical initiatives, with a focus on the pivotal Q1 2024.

    Read article

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.