2023's reputation to be set in the next 15 weeks

<p>Kia ora,</p><p>Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news the next 15 weeks will set the tone for 2023. So far in 2023 the benchmark equity market is up +15% (S&P500), benchmark bond yields are up +70 bps (UST10yr +20%), and the USD is unchanged.</p><p>First we are now in the last week before the America's Labor Day holiday, signaling the end of the "sell in May (Memorial Day) and stay away (until Labor Day)" hiatus. Financial markets will then come back to full capacity. If investors did sell in May, they have missed a +5% stock market rally. The benchmark UST 10yr rate rose +50 bps hurting bond prices. And US CPI inflation fell -1% over that time. But what awaits them? How they react will lock in 2023's reputation.</p><p>This upcoming week will be a busy one for big data releases. It will be a very busy week in the United States with investors closely following their labour market report (the non-farm payrolls report) which for August drops on Saturday, September 2 (NZT). Markets currently expect only a gain of +170,000 this time. Before then we will get the US PCE price index, personal income and spending data, JOLTS job openings, ISM Manufacturing PMI, and the second estimate of American Q2 GDP growth.</p><p>Elsewhere, the focus will be on inflation rate figures for the EU, Germany, France, Italy, Spain, and Switzerland. Additionally, flash manufacturing PMI readings will be released for China, South Korea, India, Russia, Spain, Italy, and Canada. Finally, Turkey, India, Brazil, and Canada are set to report their Q2 GDP growth figures.</p><p>The last big northern 'holiday season' event is the central banker conference at Jackson Hole.</p><p>With his eyes firmly on expected American inflation pressures, Federal Reserve Chair Jerome Powell, <a href="https://www.federalreserve.gov/newsevents/speech/powell20230825a.htm" targ