Week Ahead for FX, Bonds: U.S. PMI Data, Various -2-

Societe Generale sees recent data strengthening the case for added support, citing August retail sales up just 0.4% year-on-year and slower year-to-date fixed-asset investment growth at 7.2%, while industrial production remains a bright spot. The dollar’s slide to below 6.70 yuan helps too; Societe Generale notes the People’s Bank of China set its daily fixing at 6.7521, the strongest in the current cycle. That currency strength could offer policymakers some room, but pressure on bank margins and renewed yuan weakness could limit easing. In Australia, RBA communications and August employment data are key, with the unemployment rate expected around 4.5%. Indonesia is expected to hold its benchmark at 5.75%.