2023-09-25 04:34:05
Investors enter the final week of the quarter still digesting the surprising and sometimes contradictory decisions of central banks last week, while preparing to receive new inflation data from the United States and Europe.
Global markets felt the effects of rising U.S. bond yields and a strengthening dollar, which hit a six-month high following the Federal Reserve’s hawkish tone last week. The yen also moved closer to the closely watched $150 level.
The Federal Reserve signaled rates would stay high for longer, while its counterparts in Britain, Switzerland and Japan were surprisingly pessimistic. The euro zone’s central bank also adopted a relatively dovish tone.
Amid all this, both the pound and the euro are taking a beating this month: The euro is on track for its biggest monthly decline since May, while the pound sterling is heading for its worst monthly performance in a year.
But markets will have plenty to examine this week to try to uncover future Fed decisions. U.S. central bank officials will be out in force, starting with Minneapolis Fed President Neel Kashkari on Monday, and key inflation data is expected on Friday.
In the Eurozone, Christine Lagarde, President of the ECB, begins a series of speeches and remarks this week. Markets expect the eurozone central bank to have finished raising rates.
Preliminary consumer price data for September, due at the end of the week, will certainly remain on investors’ watchlists.
Elsewhere in Europe, Germany’s economic woes are once once more gaining attention, with the government seeking to support the struggling construction industry by indefinitely suspending plans to boost building insulation standards.
Meanwhile, difficulties in the real estate sector persist in China. Shares of China Evergrande plunged 24% on Monday, following the troubled property developer said it was unable to issue new debt due to an investigation into one of its subsidiaries, which dealt a further blow to its restructuring plans.
Film and television fans, however, may have some reason to rejoice, with news of a tentative working agreement between the screenwriters and the big firms coming out of Hollywood on Monday morning.
Main developments likely to influence the markets on Monday:
-Ifo survey on the German economy
-Christine Lagarde, President of the ECB, delivers an introductory speech.
-François Villeroy de Galhau, governor of the Banque de France, and Isabel Schnabel, member of the board of directors of the ECB, will also speak.
Fed’s Neel Kashkari participates in Q&A session
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