Weekly High Impact News Preview: September 9 - September 13
Welcome to our latest edition of the Weekly Financial Market Update, where we preview major economic events that could shape markets around the world. Here's what to watch out for in the coming week:
Investor Sentiment Shifts as Dollar Dips Ahead of Expected Fed Rate Cuts
As the Federal Reserve gears up for anticipated interest rate cuts, the U.S. dollar is showing signs of decline, having dropped 5% from its 2024 peak, and nearing its lowest in about a year against other major currencies. This decline is driven by the shift in U.S. economic conditions; with inflation cooling, the Fed, led by Jerome Powell, has indicated readiness to lower rates, starting with the upcoming September meeting. The diminishing yield advantage of the dollar is sparking investor interest in forecasting further declines, influenced by both the depth of Fed cuts and the subsequent actions of global central banks.
Traders are closely observing these developments, given the dollar's significant role in global finance. A weaker dollar could enhance the competitiveness of U.S. exports and reduce the cost of converting overseas profits. Meanwhile, investors are adjusting their strategies, reflected in a notable shift in futures tied to the Fed's key policy rate and the recent bearish positioning in dollar bets. This adjustment in expectations suggests that market participants are bracing for a potentially softer dollar regime, contingent on the U.S. economic slowdown and upcoming policy decisions.
Monday, September 9
Japan’s GDP for Q2: Early in the morning, we'll see Japan's latest GDP figures, with previous quarters showing a growth of 0.8%. Stability here is key for investors eyeing the yen in forex markets.
China’s Consumer Price Index (YoY) for August: Expected to remain steady at 0.5%. This inflation data will be crucial for investors monitoring the health of consumer spending in the world’s second-largest economy.
Tuesday, September 10
Europe’s Harmonized Index of Consumer Prices (YoY) for August: Predicted to hold at 2%, this figure could impact ECB policy decisions moving forward.
UK Labor Market Reports: Watch out for updates on employment change and the unemployment rate, crucial for gauging the economic recovery post-Brexit.
Wednesday, September 11
US Presidential Debate: The global markets will be tuning in as potential policy changes could sway market sentiments significantly.
US Consumer Price Index for August: With inflation concerns on the rise, these figures (MoM and YoY) will be particularly significant for Federal Reserve policy watchers.
Thursday, September 12
European Central Bank (ECB) Rate Decisions and Monetary Policy Statement: All eyes will be on the ECB’s interest rate decision and subsequent statements, which could influence euro movements significantly.
UK’s Monetary Policy Report Hearings: Insights into future economic policy could trigger volatility in the sterling zones.
Friday, September 13
US Michigan Consumer Sentiment Index (Preliminary for September): An important indicator for consumer confidence in the US, potentially impacting market perspectives on the American economic outlook.
Saturday, September 14
China’s Industrial Production and Retail Sales for August: Closing the week, China's production and retail data will provide further clues about the ongoing recovery in industrial activity and consumer spending.
