Global Markets - KASB

Top Economic Events of This Week | November 13 – November 17 – 2023

This week is important for the economy, with several key reports being released. Jerome Powell, the Federal Reserve Chair, recently highlighted the importance of these reports. He mentioned that current interest rates might not be high enough to reduce inflation to below 2% yearly. Also, Powell emphasized the Fed’s readiness to further tighten policies if needed.

Investors had wrongly thought the cycle of increasing interest rates was over. However, Powell’s statements at the IMF indicated a continued cautious approach, with decisions based on upcoming data.

Top Economic Events of This Week | November 6 – November 10 – 2023

This week’s economic calendar is relatively light on data releases, which means investors will be closely watching companies’ quarterly reports. Additionally, speeches from members of the Federal Open Market Committee (FOMC) will be of significant interest. One particular speech that investors are eagerly anticipating is from Federal Reserve Chair Jerome Powell on Thursday. Powell’s remarks will provide insights into the state of the economy and the direction of monetary policy.

Here are five key economic events to keep an eye on this week.

Fed Holds Rates Steady; Stocks Surge, Dollar Dips

The Federal Reserve again keeps rates at 5.25%, resulting in the stock market rising for a third day. However, the Fed Chairman dismisses the idea that future interest rate hikes are impossible. Nonetheless, US bond yields retrace downwards, and the US Dollar declines, supporting the US stock market. Most economists believed the Federal Reserve would keep rates unchanged on this occasion, but December’s meeting is less specific. According to the CM FedWatch Tool, the possibility of a rate hike in 41 days is 20%. However, if employment data and the inflation rate reach higher than expected, the chances of a hike will rise. If the possibility increases, the stock market will witness selling pressure and the Dollar may again rise.

The US Dollar Index rose in value on Tuesday and Wednesday but came under significant pressure after the Federal Reserve’s decision. This morning, the Dollar index declined by a further 0.50% and is the worst-performing currency of the day. The best-performing currency is the Euro. However, investors should remember that the Bank of England will announce their interest rate decision this afternoon. If the Bank of England’s monetary committee votes differently, the Pound’s price will likely be volatile.

Investors Eye Major Tech Earning Reports and PMIs Tomorrow

Fund managers will turn their attention to tomorrow’s major earnings announcements and significant economic reports due tomorrow. Stock market investors will look at the upcoming earnings reports and the global Purchasing Managers’ Indexes. The Purchasing Managers’ Index will be released tomorrow morning for the Eurozone and the UK, while the US will make public their data once the US trading session opens. Investors will scrutinize the data to determine if a recession is likely and if another interest rate hike is possible.

The second factor, significant for the NASDAQ and SNP500, is the quarterly earnings reports. The following companies will publicize their quarterly figures tomorrow:

Stocks Take A Dip, NASDAQ focused on Tesla’s QER

Global stocks on Friday declined as investors looked to avoid “weekend risk”, mainly due to political tension. US, European and Asian stocks fell to a lower price, with only the Dow Jones holding onto gains. The Dow Jones outperformed other indices due to the quarterly earnings release from United Health Group and J.P. Morgan. Both companies saw earnings and revenue higher than Wall Street’s expectations. As a result, both stocks rose in value but are trading lower during this morning’s Asian session.

Investors this week will mainly focus on comments from the Federal Open Market Committee members. Statements, speeches and press conferences will guide the Fed’s intentions for the next two committee meetings and rate decisions. Investors continue to believe another interest rate hike is not likely, regardless of inflation reading higher than expectations. According to many members of the FOMC, higher bond yields have resulted in mortgage rates rising and are tackling inflation without a hike. The US inflation rate read 3.7%, rather than declining to 3.6%. However, economists had previously advised inflation to read a minimum of 3.8% for another interest rate hike to be seriously considered. The main concern for investors was the producer inflation rate, which read 0.5%, notably higher than expectations. This indicates inflation will be removed above the 2% target over the next three months.

Will High Job Numbers Pressure Stocks Further? Markets Wait

Market participants await the latest US employment data to determine how the Federal Reserve will alter its policy. According to the San Francisco Fed President, Mrs. Daly, a rate hike may not be necessary if the employment sector shows a slowdown. According to Mrs. Daly, if bond yields remain this high, the central bank may not be required to raise interest rates again but hold in the longer term. However, this will largely depend on the employment data, and if the employment data reads higher than expectations, bond yields are again likely to rise and pressure the stock market.

All three of the leading US indices ended the day lower and would have witnessed a poor session if the price did not retrace towards the end of the session. By the end of the day, US indices honored the set price range, as said in yesterday’s market analysis. The NASDAQ saw the most significant decline, falling 0.36%, the Dow Jones losing 0.05%, and the SNP500 0.13%. European indices are trading slightly lower during this morning’s Asian session but are improving as the cash open nears. Global institutions may potentially be avoiding US-based assets and opting for EU equities due to the upcoming Non-Farm Payroll data. However, the US employment data will influence both European and UK equities.

Top Economic Events of This Week | October 2 – October 6 – 2023

Starting from Monday, we’re bracing for a string of potent economic revelations. On the roster are key indicators like the US ISM Manufacturing PMI, a vital measure of the manufacturing sector’s pulse, and the closely-watched JOLTS Job Openings that shine a light on the intricacies of the US labor market.

Midweek, the spotlight swings to the Eurozone with the Retail Sales m/m data, offering insights into consumer spending patterns, while the US ISM Non-Manufacturing PMI provides a broader look into the services sector.

Top Economic Events of This Week | September 25 – September 29 – 2023

The upcoming week promises a series of impactful economic announcements starting from Tuesday. Key highlights include the US CB Consumer Confidence Index, fluctuating crude oil stock changes, and GDP figures from both the US and UK. Additionally, the EU’s inflationary pressures will be under scrutiny with the CPI release.

Each of these data points holds the potential to influence global market dynamics significantly.

EU, UK PMIs Tumble: US PMI Data in Focus

The EU and UK release largely negative Purchasing Managers’ Indexes, which has sent both currencies declining. In addition to this, PMI reports will also influence popular indices such as the NASDAQ. As the Pound and the Euro decline, the US Dollar Index has risen 0.22% during this morning’s trading sessions. The US Dollar Index, as a result, rose to a new weekly high before retracing. US bullish traders will now be turning their attention to further breakouts as well as this afternoon’s US PMI data. The best-performing currency over the past 24 hours has been the US Dollar, while the worst has been the Pound, Yen and Swiss Franc. The dovish decisions of the regional central banks have triggered the poor performance of these three currencies.

The Bank of England and the Swiss National Bank unexpectedly kept interest rates unchanged. The Bank of Japan kept interest rates intact but unexpectedly gave a relatively dovish forward guidance. The pair depreciated most over the past month is the GBP/USD, which has declined 3.80%. The GBP/USD is trading at the lowest price since March 2023.

Top Economic Events of This Week | September 11 – September 15 – 2023

From pivotal inflationary reports to key central bank decisions, the upcoming days are set to be a whirlwind of activity for investors, policymakers, and financial enthusiasts alike.

Among the headline events, we’ll be delving into the US CPI report, August’s Retail Sales, September’s preliminary Consumer Sentiment Index, the anticipated ECB Interest Rate Decision, and the GDP m/m announcement.