Following a chaotic, overall costly August, September begins much as that month left off – with investors preoccupied with the US-China trade war and what central banks will do to combat a potential recession.
US: China trade war and the Fed
Though the US has Monday off thanks to Labor Day, the region is still likely to be the driving force behind the week’s trading for a couple of reasons. Firstly, the trade war has an uncomfortable, unpredictable edge to it at the moment, with Trump vacillating between immediate tariff-retaliations to China’s own reprisal, and praise for Xi Jingping as a leader and claims that both sides are willing to come back to the negotiating table.
Then there’s the Fed. There is going to be a lot of speculation this September about what the central bank is going to do in its meeting at the end of the month, with many expecting a 2nd consecutive rate cut.
What Jerome Powell and co. decide could well be informed by Friday’s non-farm jobs report, which is looking to improve on last month’s middling 164k. Elsewhere, there’re the manufacturing PMIs on Tuesday, the ADP non-farm reading on Wednesday and the factory orders and services PMIs on Thursday.
UK: Brexit continues to dominate
With it now less than 2 months until All Hallows’ Eve – aka Brexit Day – the pound is going to remain super-receptive to any signs that a no-deal belly flop out of the EU can be avoided, regardless of whether it is by an actual agreement with Brussels, or a cross-party plan involving Labour, the Lib Dems et al.
As for UK-specific data, there is the classic new month PMI-gauntlet to run, with the manufacturing, construction and services estimates on Monday to Wednesday. The FTSE will also be concerned with China’s manufacturing figures released overnight at the start of the week.
UK: Stocks to watch
In terms of the corporate calendar, Restaurant Group and DS Smith report on Tuesday; Barratt Developments and Dunelm Group on Wednesday; Go-Ahead, Enquest, Melrose and Dixons Carphone on Thursday; and Ashmore Group and Berkeley Group on Friday.
Eurozone: Economic data in focus
While the Eurozone will likely be macro-focused, there is plenty this week to keep the region preoccupied if the usual headline-grabbers don’t materialise. The final manufacturing PMIs roll out on Monday, followed by services PMIs and retail sales on Wednesday. Thursday then sees the German factory orders figures, before Friday wraps up the first week of September with the Eurozone’s revised Q2 GDP reading.
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