The upcoming week is packed with important economic events. It starts with the U.S. Empire State Manufacturing Index on Monday. On Tuesday, the U.K. will share employment data, while Canada will focus on inflation figures and the U.S. will release retail sales data. On Wednesday, we will see the U.K. inflation data and anticipate monetary policy announcements from the Bank of Canada (BoC) and the Federal Open Market Committee (FOMC). Thursday features New Zealand’s GDP and Australia’s employment numbers, along with the Bank of England (BoE) meeting, U.S. unemployment claims, and the Philly Fed Manufacturing Index. Finally, Friday will wrap up with the Bank of Japan (BoJ) announcement and retail sales data from the U.K. and Canada.

The US Retail Sales Forecast

In the U.S., retail sales are expected to grow by 0.2% month-over-month, with core sales at 0.4%. Retail sales are holding steady due to strong demand in various sectors, though spending on home improvement and dining out is weaker. Analysts predict that growth in August will slow to 0.4%, with spending likely decelerating by the end of the year due to economic challenges. The BoC may keep rates unchanged despite speculation of a rate cut. Canada’s economy shrank by 1.6% in Q2, but signs in Q3 look more stable. Inflation data may show the Consumer Price Index (CPI) rising to 2.1%, which will affect the BoC’s decisions. The Fed is likely to restart rate cuts, targeting a range of 4.00%–4.25%. Even with steady inflation and employment levels, the Fed might reconsider its long-term growth and employment goals, basing decisions on new data. New Zealand’s GDP is forecasted to decline by 0.3% this quarter due to technical factors. Growth momentum has slowed, indicating a complex trend. In Australia, August is expected to see an employment rise of 15,000, with the unemployment rate slightly increasing to 4.3%. The BoE is predicted to hold rates steady and focus on future policy signals, paying close attention to labor and inflation data. Inflation is expected to show food prices climbing over 5%, but service costs may begin to ease.

The Bank Of Japan Decision

The BoJ is expected to keep rates at 0.50%. Political changes have pushed back expected rate hikes until early 2026, with the economic situation supporting higher rates, despite modest price growth. The key event this week is Wednesday’s Federal Reserve meeting, where a rate cut is already priced into the market. Following the August jobs report, which revealed a slight cooling in hiring to 187,000 and steady core inflation at 3.5%, expectations for this move are high. Traders should watch for surprises in the Fed’s dot plot, as volatility in index futures could rise if the Fed hints at more future cuts than anticipated. The Bank of Canada’s decision adds uncertainty this week, with mixed market views on a potential rate cut. All eyes will focus on Tuesday’s inflation figures, especially after the economy officially contracted by 1.6% in Q2 2025. This uncertain scenario suggests significant movement in the Canadian dollar, making options straddles on USD/CAD an appealing strategy. For the Bank of England, we expect rates to remain unchanged on Thursday, with a shift in focus to guidance for the November meeting. Recent wage growth data is stable around 6.0%, and persistent service inflation could motivate policymakers to wait. Traders may find value in longer-dated options on GBP/USD, anticipating a possible rate cut later this year rather than immediate volatility. Attention will also be on Australian employment data on Thursday, a crucial indicator for the Reserve Bank of Australia’s future stance. We’ll be watching closely for the unemployment rate to rise to the expected 4.3%, as a higher number could increase expectations for a later rate cut. Traders should prepare for short-term volatility in the AUD/USD pair after the release. The Bank of Japan is likely to maintain current rates this Friday due to recent political instability. With inflation easing to about 2.5% last month and the yen remaining weak, there is little urgency for immediate changes. This outlook suggests that yen volatility might stay low, making strategies like selling out-of-the-money options on USD/JPY appealing for income generation. Create your live VT Markets account and start trading now.

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