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Hello everyone, today XM Forex will bring you "[XM Official Website]: Five major events that will happen in the global market this week". Hope it will be helpful to you! The original content is as follows:
The U.S. labor market grew only 22K in August, below the already low three-month average of 29K and well below the 75K expectations. Investors have little time to recover from the non-farm employment (NFP), and inflation data could further zgykf.cnplicate the situation at the Federal Reserve (Fed), USD, stocks and gold prices.
1) Two court cases may affect the market
Can Fed director Lisa Cook vote in next week's interest rate decision? The court has not yet ruled whether she can continue to hold a position during the trial of the case against which her dismissal was heard. If Cook had to wait outside, it would have another blow to the Fed's independence, pushing gold prices up and putting pressure on stocks.
Another ruling could be made this week on U.S. President Donald Trump’s request to speed up the Supreme Court’s ruling on the legality of most tariffs. Investors are eager to understand when a judge will make a decision after two lower courts believed most of his tariffs were illegal.
2) American PPI warms up for main course
Wednesday, Beijing time at 20:30. Producer Price Index (PPI) reports tend to fluctuate month by month, but annual data remains an indicator of inflation and affects personal consumption expenditure (PCE), the Fed's preferred price increase indicator.
Core PPI rose 3.7% year-on-year in July, and it would be worrying if it further approached 4% in August. In theory, the price at the factory gate—another name of PPI—will eventually affect consumer prices.
3) European Central Bank's decisionIt may shift from interest rates to supporting the debt market
On Thursday, a decision was made at 20:15 Beijing time, and a press conference was held at 14:45 GMT. The European Central Bank (ECB) is generally expected to keep borrowing costs unchanged after a series of rate cuts. The bank's main loan interest rate is 2.15% and deposit interest rate is 2%, similar to the inflation indicator in the euro zone.
Is the ECB willing to consider further rate cuts? It depends on the economic outlook. Frankfurt’s institutions release new growth and inflation forecasts at this time, which may provide clues.
The appreciation of the euro (EUR) may push down prices, allowing for looser monetary policy, and economic deterioration (such as due to U.S. tariffs or other factors) may be the case. On the other hand, the eurozone economy remains active, strengthening the hawks' confidence.
Reporters will ask ECB President Christina Lagarde about future interest rate plans and other topics. One of the problems is buying bonds to support uneasy markets, especially in Lagarde’s homeland France. This decision zgykf.cnes as a result of the political crisis in Paris. The ECB president is unlikely to promise any upcoming support.
4) The US CPI will cause significant market fluctuations
Thursday, Beijing time at 20:30. The Consumer Price Index (CPI) is the main event this week, and the Fed is in a "silent period" - members do not make any zgykf.cnments about monetary policy before making decisions.
Investors and the Fed focus on core CPIs, excluding volatile energy and food prices, and are expected to rise 0.3% month-on-month in August, the same as the reading in July. The annual inflation data rose to 3.1%, and any further increase would mean a decrease in the likelihood of a rate cut.
The bond market is currently expected to cut interest rates by 25 basis points each for the remaining three meetings of the year. While the rate cuts in September are almost certain, further rate cuts in October and December depend on whether inflation remains within controllable range. U.S. President Donald Trump's tariff policy has limited impact, but that may change.
5) US consumer confidence will end this week
Friday, 22:00 Beijing time. The University of Michigan Consumer Confidence Index is not always related to actual purchases, but its launch will shake the market. The index has rebounded slightly from its lows in recent months, reaching 58.2 in August. Preliminary readings for September are expected to rise to 59.2.
In addition to the overall data, traders will also focus on inflation expectations zgykf.cnponents, which are relatively high: 3.5% in the long term and 4.8% in one year, according to the August report.
The Fed's inability to respond to the CPI report may cause some anxiety in the market. Price fluctuations can be very severe, so be cautious when trading.
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