The Market this Week: 25 September

By Stephan Maier
Editor, Economics Student

Continuing from last week, the FED continues to dominate market sentiment with chair Janet Yellen speaking to the House Financial Services Committee on Wednesday. US equities, despite sliding on Friday, rose by 1.2% over the past week, welcoming the increased certainty of one rather sure rate hike this year in December, should the job market continue to improve. Markets will likely watch out for more hints in the Wednesday speech as well as Yellen speaking to the Minority Bankers Forum in Kansas City on Thursday. [3]

On Monday, ECB president Mario Draghi will speak before the European Parliament on Committee on Economic and Monetary Affairs, and on Wednesday he is planning to address the German Bundestag on recent economic developments. Markets are likely to watch out for signs that the ECB will further boost monetary stimulus in December.

Bank of Japan Governor Kuroda will speak in Tokyo on Thursday, investors will be interested in his comments after the shift in the bank’s policy to targeting interest rates on government bonds instead of focussing on increasing the monetary base.

Back to the US, the first one-on- one debate between presidential candidates Donald Trump and Hillary Clinton will be a major event as analysts currently do not consider a Trump victory and markets have surely not priced in such a scenario. The debate can be a decisive moment as Dan Clifton, head of policy research at Strategas, pointed out to CNBC: “Hillary needs this debate like [President Ronald] Reagan did to show her health is strong, and that she is a much better commander-in- chief than Donald Trump. If she has a health scare, a coughing fit or something that doesn’t look well … that could end her candidacy. You see the stakes she’s walking on.”

On Monday OPEC members will hold talks with non-member Russia. Chances that the talks will result in a freeze are low according to some analysts, as most believe such action would wait until the next official OPEC meeting in Vienna near the end of November. The political divide between Saudi Arabia and Iran becomes apparent in the talks that led to the failure of previous measures earlier this year. [3]

Numbers coming out next week that investors will pay particular attention at are New Home sales on Monday, Durable goods orders on Wednesday (huge decline for August expected) and Consumer Confidence for September on Tuesday for the US, German unemployment data on Thursday, Eurozone CPI and unemployment on Friday and UK quarterly GDP data on Friday as well.


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