The Market this Week: 18 September

By Stephan Maier
Editor, Economics Student

The dominating announcement for an otherwise quiet coming week will be the FED’s Federal Open Market Committee deciding on interest rates and publishing their decision at 7 pm our time on Wednesday. With a lot of talk about a rate hike in 2016 and no action taken so far, forecasts currently hint at some action coming much later on this year. A survey by the Financial times states that 85% of Wall Street economists expect no change from the current 0.5% this month [1]. Hence it might be less the announcement of interest rates than Chair Yellen’s statement 30 minutes later that traders should be looking at for further hints [2].fed-rates

On a related note, the second major central bank announcing a rate decision this week is the BoJ. With current rates already below zero at -0.10%, economists do not expect changes or further easing, rather a defence of the bank’s current policy [2]. The Reserve Bank of New Zealand is thought to hold as well (Thursday).

Further interesting news in the US to look out for are building permits issued (Tuesday) as a general indicator of demand in the housing market and as such maybe hinting at which way the tide might be turning in the general economy. On a weekly basis it is always a good idea to look at initial jobless claims on Thursday and crude oil inventories on Wednesday.

The European Systemic Risk Board chaired by Mr Draghi will begin its conference on Thursday. We can expect updates on French business confidence and euro-area consumer confidence the same day [3].

We can expect a rather quiet week in the UK with public sector borrowing figures released on Wednesday and Moody’s sovereign rating for the UK being renewed on Friday. The September Rightmove house price index will be released on Monday [3].

Politically, the UN general debate will bring world leaders together in the coming days, so maybe always keep an eye out for any developments on this front.

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