Market Outlook & Potential Issue Forecast Sept 9 - 13

Investors will undoubtedly be watching this week’s European Central Bank meeting, in addition to developments around Brexit as well as the intensifying U.S. - China trade war amid heightened concerns on the growth outlook for that global economy.

The U.S. dollar was holding above one-week lows against a currency basket on Friday following a mixed U.S. jobs report for August reinforced the view of the slowing expansion and likelihood of more interest cuts from your Federal Reserve.

Fed Chair Jerome Powell did little to improve those expectations. At an overseas event on Friday, he cited risks specifically U.S.-China trade tensions that could derail the current U.S. economic expansion, that is the longest one on record.

Interest futures still implied traders positioned for any quarter-point rate decrease in the Fed’s Sept. 17-18 policy meeting following’s Fed Rate Monitor Tool.

“We will become appropriate to sustain the expansion,” said Powell on the panel in Zurich.

In late U.S. trading, the U.S. dollar index that tracks the greenback contrary to the euro, yen, sterling and three other currencies was steady at 98.37 after hitting a one-week low of 98.08 on Thursday. The dollar index ended the week down 0.6%, its steepest weekly loss in per month.

The greenback lost ground against its rivals as global tensions receded, especially with China and America agreeing to high-level trade talks in October.

The British pound was down 0.4% at 1.2277, but well above the sub-1.20 three-year lows hit on Monday after lawmakers voted to block a no-deal Brexit, creating a snap election much more likely. For that week, sterling gained 1%.

“The primary threat to sterling’s recovery is if Johnson’s Conservative party were to win with many within an early election. They might then overturn the legislation requiring these to require an extension, increasing the risk of leaving without a deal,” said Mark Haefele, Chief Investment Officer, UBS Global Wealth Management.

Haefele predicted that this pound would weaken to at least one 1.15 or reduced the event of the no-deal Brexit.

The euro was steady at 1.1029 per dollar in late trade, to get rid of the week up 0.35%.

Before the coming week, has compiled a summary of significant events more likely to affect the markets.

Monday, Sept 9

U.K. GDP (QoQ)

China CPI, PPI (Aug)

Tuesday, Sept 10

U.K. Employment report (Jul)

U.S. Jolts job openings (Jul)

Wednesday, Sept 11

U.S. PPI (Aug)

Thursday, Sept 12

U.S. CPI (Aug)

EuroZone ECB rate decision & press conference

Friday, Sept 13

U.S. Retail Sales (Aug)

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