- Funeral of Queen Elizabeth II
- Critical rate decision from the US Fed
- Bank of England’s delayed meeting
Monday 19th September
UK markets are closed for the observance of the funeral of Queen Elizabeth II. There is also a Bank Holiday in Japan. Overnight sees the release of the UK’s Rightmove House Price Index. Later, we have the German Bundesbank’s monthly report and the NAHB Housing Market Index from the US. Today’s earnings announcements include AutoZone, Ennis, and Neogen Corp.
Tuesday 20th September
Overnight we have Japan’s National Core CPI and minutes from the Reserve Bank of Australia’s last monetary policy meeting. Then we have the German Producer Prices Index (PPI), the Euro zone Current Account and Canada’s Consumer Price Index (CPI). From the US we have Building Permits and Housing Starts. The biggest earnings releases today include Aurora Cannabis and Stitch Fix.
Wednesday 21st September
From the UK we have Public Sector Net borrowing and CBI Industrial Order Expectations. From the US we have Existing Home Sales and Weekly Crude Oil Inventories. But the highlight of the week, if not the whole summer, is the US Federal Reserve’s FOMC meeting. This will be the first monetary policy meeting since July when the Fed raised rates by 75 basis points for the second successive month. This took the key Fed Funds rate up to 2.50% – its highest level since June 2019. Speculation has been rife concerning the Fed’s next move, with forecasts swinging between a 50 or 75-basis point increase. But the latest inflation update in the form of the August Consumer Price Index (CPI) has put the cat amongst the pigeons. This showed a sharp unexpected up-tick in the month-on-month data, suggesting that inflation may not have peaked as many had hoped. The news triggered a dramatic sell-off across risk assets with the tech-heavy, rate sensitive Nasdaq 100 closing over 5% lower on the news. It also led to a dramatic repricing in expectations for the Fed meeting according to the CME’s FedWatch tool which calculates the odds based on real money trading the fed funds futures market. The probability of a 50-basis point increase has dropped to zero, while the likelihood of 100-basis points soared to 32% before pulling back. The current expectation is that there’s an 80% chance the Fed will raise rates by 75-basis points, and a 20% possibility of a 100-basis point increase. Major earnings reports come from General Mills, HB Fuller, KB Home, and Lennar Corp.
Thursday 22nd September
Today sees the release of monetary policy statements from the Bank of Japan (BOJ), the Swiss National Bank (SNB) and the Bank of England (BoE). The BOJ and SNB have headline negative interest rates of -0.10% and -0.25% respectively. While the BOJ has left its key rate unchanged for many years, the SNB raised its Policy Rate to -0.25% from -0.75% in March this year. It will be interesting to see if there’s an additional move this month. The BoE meeting was scheduled for last week but was moved in observance of the 10 days of mourning following the death of Queen Elizabeth II. The current speculation is that the Bank will raise its Official Bank Rate by a least 50-basis points from the current level of 1.75%. High inflation remains the key issue, although there was some relief when the latest update on Headline CPI came in lower than expected, dropping back below 10% year-on-year. Later in the day we have US Weekly Jobless Claims, the CB Leading Index and Euro zone Consumer Confidence. Key earnings reports come from Accenture, Carnival, Costco, Darden Restaurants, and FedEx.
Friday 23rd September
Overnight we have Australian Flash Manufacturing and Services PMIs. There is another Bank Holiday in Japan. Then we have Flash Manufacturing and Services PMIs from France, Germany, the Euro zone, the UK, and the US.
