Markets Looking Ahead to Next Week’s Central Bank Policy Meetings
September 17, 2021
The Federal Reserve heads a long list of central banks reviewing monetary policy next week. Among the others on tap are central banks in Japan, Turkey, the U.K., Switzerland, Sweden, Indonesia, Brazil, China, South Africa, Taiwan, Norway and the Philippines. Investors hope to get more clarification on when Fed will begin tapering bond purchases and other details of that operation.
There’s been little this Friday to distract markets from looking ahead to next week’s central bank decisions
The dollar overnight rose 0.9% relative to the Turkish lira and 0.3% against the yen but slipped 0.2% versus the Australian dollar and 0.1% against the euro, loonie, peso, Swiss franc and DXY weighed index.
Ten-year sovereign debt yields rose four basis points in Switzerland and Italy, three bps in France, Portugal and the Netherlands, and two bps in Germany, and a single basis point in Great Britain and the United States.
Equity markets closed up 1.0% in Hong Kong, 1.1% in New Zealand, 0.6% in Japan, 0.3% in South Korea, and 0.2% in China but have fallen by 0.8% in Australia, 0.6% in Germany, 0.4% in Italy, 0.3% in Switzerland, 0.2% in France, and 0.1% in Great Britain. U.S. stock market futures are modestly lower.
The price of WTI oil experienced a rising trend this week but has settled back 0.7% so far today. Gold firmed slight.
British retail sales volume underperformed expectations in August despite a 1.5% increase in automotive fuel. A 0.9% drop in total sales was the fourth straight monthly decline, depressing the 12-month rate of change to zero percent from increases of 1.9% in July, 24.3% in June and 42.3% in May.
New Zealand’s manufacturing purchasing managers index slumped to a 16-month low of 40.1 in August from 62.2 in July. This was the first sub-50 reading of this diffusion index in 2021, which signals a deterioration of economic activity.
The preliminary estimate of consumer price inflation in the euro area was not revised after examination of subsequent information. Total CPI inflation rose 0.8 percentage points to a 117-month high of 3.0%, and core inflation more than doubled to a 109-month high of 1.6%. Energy prices climbed 1.0% on month and 15.4% on year.
Today’s other Euroland statistical releases include
- A disappointing 0.1% uptick in Ezone construction output in July following a trio of declines amounting to 0.3% in April, 0.5% in May, and 0.6% in June. July construction was 3.3% greater than in July 2020, but the net increase from January 2021 was only 0.9%.
- A EUR 30.2 billion seasonally adjusted current account surplus in July. That’s a three-month high and also up from EUR 26.1 billion in July 2020. The surplus of EUR 321 billion accrued over the past twelve reported months equaled 2.7% of GDP versus a surplus of 2.1% of GDP in the year ending July 2020.
Austrian CPI inflation accelerated to a 116-month high of 3.2% in August, while Portuguese PPI inflation that month of 11.0% was up from 10.2% in July and the most since September 2000.
The U. Michigan/Reuters preliminary estimate of U.S. consumer sentiment in September will be reported later this morning. In August, such weakened sharply to a reading of 70.3 from 81.2 in July, and only a small rebound is expected this months. Covid remains a huge depressant. Yesterday 149.4k new cases were identified, and almost 2000 people died from the disease.
Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: British retail sales, central bank policy reviews next week, Euroland current account
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