FOMC, German Court’s ESM Ruling, And China August Data Dump: Economic Events for Sept. 10-14

The week is chock-full with data releases, but the Federal Reserve's policy meeting on Sept. 12-13 will carry the most weight.

The Fed appears poised to launch a third round of large-scale asset purchases, or QE3, at this week's two-day Federal Open Market Committee meeting, which concludes on Thursday. Policy makers will also likely extend their low policy rate guidance into late 2015.

If the Fed does unveil a new round of quantitative easing, the program should be open-ended and should include purchases of Treasury and agency mortgage-backed securities. Under such a program, the committee would likely announce a monthly purchase rate, or an intermeeting purchase amount, and seek to tie the timing and pace of purchases to evolving economic conditions.

If the Fed were to decide against an open-ended program in favor of a specific purchase amount, economists at Barclays Capital say the central bank will likely state its intention to purchase up to $500 billion, with the program extending into the first half of 2013.

Wednesday will be a big day for Europe, with the German Constitutional Court's ruling on the European Stability Mechanism, or ESM, the Dutch general election and European Commission President José Manuel Barroso's annual State of the Union speech.

Outside the euro zone, the Swiss National Bank will hold its quarterly monetary policy meeting this Thursday.

Then there's the monthly data dump from China. Chinese economic data since the beginning of the third quarter have been a series of disappointments. Economists expect another batch of soft readings in the August data while the government likely remained less generous than the market had hoped in terms of credit support.

Data points due Sunday include: Consumer price index, producer price index, industrial production, fixed asset investments and retail sales. On Monday, we'll get China's exports and imports results. New loans and M2 growth are due later in the week.

Below are entries on the economic calendar Sept. 10-14. All listed times are EDT.

Monday

3:00 p.m. - Consumer credit is expected to expand by $9.05 billion in July, after rising $6.46 billion in the prior month.

Non-U.S.:

China - August exports and imports.

France - July industrial production.

France - BdF industrial business sentiment for August.

Sweden -- July industrial production.

Norway - August CPI.

Italy - Q2 GDP, final reading.

Tuesday

7:30 a.m. -- NFIB small business optimism index for August.

8:30 a.m. - Economists are looking for a widening in the nominal trade deficit in July, to $44 billion from $42.9 billion.

Non-U.S.:

Greece -- Prime Minister Antonis Samaras meets European Central Bank President Mario Draghi in Frankfurt.

E17 -- European Central Bank Executive Board member Joerg Asmussen speaks on "Central Banking in the Crisis and Beyond" in Frankfurt.

China - August new loans and M2 growth.

U.K. - July visible trade balance.

Japan - July core machinery orders and index of tertiary industry activity.

Wednesday

TBA - FOMC first day of two-day meetings.

7:00 a.m. -- Mortgage Bankers Association's mortgage index for the week ending Sept. 8.

8:30 a.m. - Import prices likely rose 1.5 percent in August from the prior month, with a strong gain in petroleum prices, combined with a rebound in ex-petroleum prices. Export prices likely rose 0.1 percent last month, after advancing 0.5 percent in July.

10:00 a.m. - Economists expect wholesale inventories to post a 0.2 percent gain in July, following a 0.2 percent decline in June. Wholesale sales likely rose 0.9 percent, after falling 1.4 percent in the prior month.

Non-U.S.:

Germany -- Constitutional court will decide whether to issue a temporary injunction for European Stability Mechanism and fiscal pact laws.

Netherlands -- Parliamentary elections.

E17 - European Commission to unveil its proposal for banking union.

New Zealand - Reserve Bank of New Zealand official cash rate for September.

France - August HICP, CPI.

Germany - August HICP, final reading.

Spain - August HICP, final reading.

E17 - July industrial production.

Italy - July industrial production.

U.K. - July ILO unemployment rate and average weekly earnings.

Thursday

All day -- Federal Reserve's symposium on stress testing models.

8:30 a.m. -- Economists look for initial jobless claims to tick up to 370,000 for the week ending Sept. 8, from 365,000 in the prior week.

8:30 a.m. - The Producer Price Index, or PPI, likely rose a month-on-month 1.4 percent in August, compared with a 0.3 percent rise in the prior month. At the headline level, this should largely reflect a sharp jump in the gasoline component, alongside gains in other energy components and a solid rise in food prices, partly due to the effect of droughts in the Midwest on grain prices over the summer. Meanwhile, economists have penciled in a 0.2 percent climb in the core PPI.

12:30 a.m. - FOMC rate decision. August's disappointing jobs report added ammunition for additional easing from the Fed. Most economists say they expect the Fed to launch a third round of quantitative easing, or QE3, at their Sept. 12-13 meeting and extend its low policy rate guidance into late 2015. The program should be open-ended and should include purchases of Treasury and agency mortgage-backed securities. Under such a program, the committee would likely announce a monthly purchase rate, or an intermeeting purchase amount, and seek to tie the timing and pace of purchases to evolving economic conditions. If the Fed were to decide against an open-ended program in favor of a specific purchase amount, economists say the central bank will likely state its intention to purchase up to $500 billion, with the program extending into the first half of 2013.

2:00 p.m. -- FOMC to release projections of economy and Fed funds rate.

2:00 p.m. - Economists look for an August budget deficit of $115 billion. This would be a 14 percent improvement from the August 2011 deficit and put the fiscal-year 2012 deficit on pace for $1.2 trillion.

2:15 p.m. - Fed Chairman Ben Bernanke holds press conference.

Non-U.S.:

Russia -- Overnight repo rate for September.

Indonesia -- Bank Indonesia reference rate for September.

Korea -- South Korea 7-day repo rate for September.

Switzerland - September interest rate announcement.

Philippines -- BSP policy rate for September.

Chile - Overnight rate target for September.

Sweden - August CPI.

Italy - August HICP, final reading.

Friday

All day -- Federal Reserve's symposium on stress testing models (cont.)

8:30 a.m. - Retail sales likely rose by 0.7 percent month-on-month in August, which should reflect a boost from gasoline sales and auto sales. Elsewhere, economists are looking for a 0.3 percent gain in "core" sales, following the 0.9 percent jump in July.

8:30 a.m. - Headline consumer price inflation, or CPI, is likely to pop higher in August, rising 0.5 percent monthly after a flat reading for July. This jump is likely due to upward pressure from both food and energy prices, with the average price of a gallon of gasoline notably climbing nearly 30 cents from July to August. Although food prices also are inching higher, much of the impact from the drought is unlikely to be felt for several more months. As a result, the headline CPI inflation rate is likely to rise 1.7 percent from a year ago, interrupting the steady decline in headline inflation from 3.9 percent in September 2011 to just 1.4 percent in July. Meanwhile, core inflation is likely to remain modest, rising a soft 0.2 percent in August after a 0.1 percent increase in July. This should put the annual core CPI inflation rate at 2.0 percent in August, down marginally from 2.1 percent in July.

9:15 a.m. - Industrial production likely rose 0.1 percent monthly in August following the solid 0.6 percent increase in July. That leaves the capacity utilization rate unchanged at 79.3 percent.

9:55 a.m. - Economists expect the University of Michigan survey of consumer sentiment to slip to a reading of 74 in September from 74.3 in August, as weak jobs growth continues to squeeze expectations.

Non-U.S.:

Belgium -- Federal plan bureau likely to revise growth forecast.

Germany -- Final Bundestag debate on 2013 federal budget.

E17/E27 -- Regular Eurogroup meeting / start of informal Economic and Financial Affairs Council, or ECOFIN, in Cyprus.

E17 - Q2 euro zone employment.

E17 - August HICP.

Finland - August HICP.

Austria -- August HICP.

Sweden - Q2 GDP, final reading.

New Zealand - September consumer confidence.

Sources: Central banks, European Commission, Reuters, Bank of America Merrill Lynch, Market News, Capital Economics, Nomura.