Upcoming week: central bank speeches, PMIs, and key data releases ahead

The new trading week begins quietly on Monday with no major scheduled economic events for the FX market. Still, market participants will be watching remarks from ECB President Christine Lagarde and Bank of Canada Governor Tiff Macklem.

The likelihood of these addresses triggering large market moves is small, but Macklem's comments will be examined for signals on the BoC's policy direction, especially whether ongoing high energy prices might increase the chance of a rate increase this year.

Several Federal Open Market Committee members are due to speak throughout the week as well, and those remarks will be closely tracked for hints on future monetary policy.

Tuesday sees the release of the ADP weekly employment change and the Richmond manufacturing index from the United States. On Wednesday, flash manufacturing and services PMI readings come out for Australia, the eurozone, the United Kingdom, and the United States.

Thursday brings Australian employment change figures and the unemployment rate, while Switzerland's highlight is the Swiss National Bank's monetary policy decision. Canada releases retail sales data, and the U.S. publishes weekly unemployment claims and new home sales numbers.

Friday wraps up the week with U.S. durable goods orders month-on-month, the revised University of Michigan consumer sentiment index, and the revised UoM inflation expectations. Japanese financial markets will be closed for bank holidays from Monday through Wednesday.

In the eurozone, the main question is whether business activity holds steady despite climbing energy costs and heightened tensions in the Middle East involving the U.S. and Iran, as well as Saudi Arabia and Yemen.

For Australia, the consensus forecast for employment change stands at 20,900, compared with the prior reading of -15,800. The unemployment rate is anticipated to stay unchanged at 4.5%.

After gains in May and June, employment dropped by 15,000 in July, missing analysts' expectations. Despite the monthly decline, job growth through the first half of the year remained relatively solid, supported by the recovery in economic activity. With headwinds building, Westpac analysts project a slower pace of job gains in the second half, forecasting +30,000 in August.

The unemployment rate edged up only slightly from 4.43% to 4.46% in July, rounding to 4.5%. The decline in employment was partly offset by an 11,700 drop in the labour force, as the participation rate slipped 0.1 percentage point to 66.9%. With participation hovering around 66.9%, the jobless rate is expected to remain at 4.5%.

At this week's meeting, the SNB is widely expected to keep its policy rate at 0%, with analysts predicting the central bank will stay on hold in the coming quarters. Although Q2 GDP surprised sharply to the upside with 1.5% quarter-on-quarter growth, half of that increase came from the volatile chemicals and pharmaceuticals sector. GDP growth is expected to slow in the second half of the year.

Inflation remains contained, with headline CPI at 0.8% year-on-year in August and core inflation, excluding petroleum products, at just 0.3%. The strong franc continues to limit price pressures on imports, keeping inflation under control despite energy shocks.

Despite some weakening against the euro in recent months, which has offered some support to exports, the CHF remains strong by historical standards, according to ING analysts. FX intervention remains a backstop against a sharp franc appreciation, but systematic intervention is not currently anticipated.

In Canada, the consensus for core retail sales month-on-month is -0.5% versus the prior 0.5%, while overall retail sales month-on-month are expected at -0.8% compared with the previous 0.6%. The July retail sales report is expected to reinforce signs that consumer activity began to lose momentum after a strong Q2.

RBC analysts stressed that the underlying picture may be weaker than the headline suggests, particularly once higher gasoline prices are taken into account. Early industry data showed a notable drop in vehicle sales in July, pointing to softer consumer spending.

Despite the monthly decline, retail sales volumes are still expected to remain fairly solid on a year-over-year basis, supported by the strength accumulated earlier this year. In June, volume sales were up roughly 2% from a year earlier. There are also signs of a recovery in August based on RBC card transaction data and a rebound in auto sales.

In the U.S., the consensus for core durable goods orders month-on-month is 0.5% versus the prior 0.4%, while durable goods orders month-on-month are expected at -0.3% compared with the previous 1.1%.

U.S. durable goods orders are expected to come under pressure in the August data, with the report likely affected by a weak set of orders at Boeing during the month. The aircraft manufacturer's performance is expected to weigh on the overall reading, but the focus will be on how much the Boeing weakness influences the broader headline figure.

The consensus for the new home sales report is 619,000 versus 607,000 previously. New home sales have held up better than resales this year, supported by builder incentives such as price cuts and mortgage rate buy-downs.

However, rising mortgage rates have eroded that support, and new home sales fell 10.5% in July as the average 30-year mortgage rate increased by 20 basis points before levelling off around 6.7% in August.

Buyer traffic remained steady while the share of builders offering incentives was unchanged at 63%, according to the NAHB. Against that backdrop, Wells Fargo analysts forecast a rebound of 2.6% in August to 623,000 new sales.