Review of the key events for the upcoming week 14.09 - 20.09
Main events of the coming week
Financial markets continue to show very high volatility due to the mixed flow of incoming economic and geopolitical news. The United States remains the main source of uncertainty. Last week, lawmakers failed to agree on a new package of economic stimulus measures, which was one of the reasons for the sell-off on the US stock market. Tech stocks were hit the hardest.
The outlook for the US economic recovery remains uncertain due to the continued high rate of spread of the COVID-19 pandemic. Considering the above, all the attention of investors in the coming week will be directed to the FOMC meeting. Investors are expecting signals from the regulator about further plans to change monetary policy in the face of general economic and domestic political uncertainty.
China - Big Block of Economic Statistics and NBS Press Conference
The Chinese economy continues to demonstrate high rates of recovery from the shock and is in fact the main engine of growth in the Asian region. New macroeconomic statistical data from China may have a strong impact on the dynamics of the movement of stock indices and the entire commodity sector. Experts expect industrial production to grow from 4.8% to 5.1%.
Germany - ZEW Indexes
In recent weeks, leading indicators from Germany indicate a slight slowdown in the pace of economic recovery, which raises concerns among investors. Experts predict a moderate decline in leading indicators from the ZEW, which may have a negative impact on the dynamics of the movement of the European currency.
US - FOMC meeting.
In late August, FRS Chairman Jerome Powell announced a new approach to inflation targeting, which implies a softer approach to responding to a short-term inflation target of 2%. The new FRS strategy involves the implementation of a softer monetary policy for a longer period of time.
Investors do not expect interest rate changes from the upcoming meeting, but the regulator may signal a possible expansion of stimulus measures. FRS statements may increase the pressure on the US dollar and stabilize the situation on the US stock markets.
Japan - Bank of Japan meeting
The Japanese economy is in deep crisis, but the Central Bank's choice of stimulus instruments remains limited. The Bank of Japan has been applying super-soft monetary policy for a long time and keeps interest rates at negative levels. Further easing of monetary policy can only worsen the state of affairs in the economy. Experts expect that the regulator will leave the main parameters of the monetary policy unchanged.
United Kingdom - Bank of England Meeting
The UK economy is showing a moderate recovery after the shock suffered in the spring. A limiting factor is not only the risks associated with Brexit, but also the difficult epidemiological situation. Uncertainty about the prospects for the UK economy remains high. Considering the above, we should expect the main parameters of the Bank of England’s monetary policy to remain unchanged. The final statements of the head of the Bank of England regarding possible responses to the situation with Brexit will have a key impact on GBP.