Slow Start to a Week Chocked Full of Central Bank Policy Meetings and Data

September 18, 2023

The dollar softened overnight by 0.2% relative to the yen, Swiss franc, Aussie dollar and sterling and by 0.1% against the euro, Canadian dollar and Mexican peso.

Stock markets fell 1.4% in Hong Kong, 1.3% in Taiwan, 1.0% in South Korea, and 0.7% in Indonesia and Australia. Share prices so far show losses today of 0.6% in Germany, 0.7% in Italy and 1.1% in France, but U.S. stock futures are up 0.1%. Japan is closed for Respect for the Aged Day.

Ten-year sovereign debt yields have increased three basis points in Italy, two basis points in Germany, France and Spain and a basis point in the United States.

The uptrend in the price of WTI oil was extended 0.6%, and that of bitcoin has risen 1.5%.

Data releases for investors to react on this Monday have been limited. Ireland’s construction purchasing managers index sank to an 8-month low of 44.9 in August, and New Zealand’s service sector PMI reading of 47.1 showed a deepest rate of contraction in 19 months. The British Rightmove house price index posted the biggest year-on-year dip this month (-0.4%) in nearly four years, and Czech producer price inflation bounced up to 1.8% in August from July’s 29-month low of 1.4%.

Monday’s calendar belies a week thick with data releases including British, Euroland, Canadian, Japanese, Cypriot, Austrian, Malaysian, South African, Hong Kong and Icelandic consumer prices; Spanish, Dutch and New Zealand GDP; German, Portuguese, Polish, British, Russian, Latvian and South Korean producer prices; French and South African business sentiment; preliminary Japanese, Australian, Euroland, British and U.S. purchasing manager survey findings; U.S. housing starts and existing home sales; Euroland, Turkish, Danish, Belgian, British, and Dutch consumer confidence; British and Canadian retail sales; and Japanese, Malaysian, and South Korean trade figures.

The week’s main attraction, however, will be the parade of central bank interest rate policy reviews, led by the Federal Reserve but also including monetary authorities in Japan, China, South Korea, Indonesia, Taiwan, the Philippines, Sweden, Norway, Great Britain, Switzerland, Turkey, and Brazil. Last week, the European Central Bank engineered its tenth rate hike since July 2022 but also suggested that no more moves may be necessary, a message reinforced today by ECB Vice President de Guindos, who observed that aspects of core inflation have begun to lessen in the euro area.

Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.




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