review the upcoming economic events that you should be monitoring. This week’s focus

will dead on the Federal Reserve decision due on Thursday afternoon. Most headlines

will center on comments about what to expect from the Fed. The Federal Reserve could raise

rates this month for the first time since 2006, although it is still not certain. All

other events and data take a back seat, even if they still carry a degree of weight, such

as UK unemployment data. It would be foolhardy to predict what will happen to asset prices,

since even no move could provoke volatility if the accompanying statement and press conference

provide hints about future policy. On Sunday the monthly batch of Chinese economic

indicators are released: retail sales, production and investment. There are signs that Chinese

economic activity is gaining pace and investors would want to see further confirmation of

that trend. Expect annual retail sales growth near 10.6

per cent with production near 6.3 per cent and investment near 11.2 per cent. The risk

is that the results print on the weaker side of expectations, especially given that China

closed down heavy manufacturers and restricted transport in Beijing due to the World Athletic

Championships. We would expect activity levels to lift in coming months.

In the US, the week kicks off on Tuesday with retail sales figures, industrial production

and the influential Empire state survey scheduled for release. Retail sales may have expanded

by a good, but not great, 0.4 per cent in August while the underlying (non-auto) measure

may have lifted by 0.3 per cent. The pull back in the 'flash' manufacturing index has

economists expecting that industrial production may have eased by 0.2 per cent in August after

the 0.6 per cent lift in July. On Wednesday the key consumer inflation figures

(the consumer price index) is released alongside the NAHB housing market index. The CPI for

August should once again show that headline inflation is rather tame. In July the consumer

price index rose 0.1 per cent to be up just 0.2 per cent over the year. Even stripping

out food & energy prices, the core CPI rose by a tame 0.1 per cent in July. Economists

tip the core CPI measure to fall by 0.1 per cent in August to be up 1.8 per cent over

the year. The US central bank policymaking group ,the

Federal Open Market Committee, meets over Wednesday and Thursday with the decision announced

at 4am Sydney time on Friday morning. The guessing game as to when the Fed will lift

rates may not be resolved -- the probability of the meeting deciding the first interest

rate rise in a decade -- is around 28 per cent. However, the text of the decision will

be important in determining whether the Fed is on course to lift rates in December.

The FOMC’s rate decision, policy statement and economic projections will be delivered

after late on the day on Thursday so markets will be able to react until Friday. Chair

Janet Yellen will also participate in her bi-meeting press conference following the

conclusion of the meeting.