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Hello everyone, today XM Forex will bring you "[XM Forex]: Five major events that will happen in the global market this week". Hope this helps you! The original content is as follows:
Can the United States and China find a solution to their trade issues? Will the U.S. government reopen? These questions are weighing on investors' minds, but at least there will be some economic data released this week.
U.S. President Donald Trump and Chinese President Xi Jinping plan to meet at next week's Asia-Pacific Economic Cooperation (APEC) summit - but only if they agree to reduce trade tensions. Negotiations between the world's two largest economies continue, but so far they have only added more measures, such as transport charges.
The main topic of controversy is Beijing’s new export controls on rare earths. These minerals are used in electric vehicles and other industries, and China controls about 70% of production.
Investors are convinced that Trump is so sensitive to stock market swings that he will eventually back down - a so-called TACO (Trump Always Backs Down) deal. According to the Wall Street Journal, the Chinese also believe that the United States will zgykf.cnpromise first.
However, there could be a miscalculation leading to 100% punitive tariffs, as the zgykf.cnmander-in-Chief has hinted at one point.
If the two leaders announced progress and met, it would boost stocks, while a breakdown in talks would send gold and the U.S. dollar (USD) soaring.
Lawmakers in Washington are in no hurry to reach an agreement to reopen the government. That means more people are without paychecks, some federal services are suspended and the release of nearly all economic data is delayed.
This uncertainty is driving increased market volatility, the longer the shutdown lasts, the worse the situation may be.
Any news of bipartisan efforts to reopen the government will support stocks, while the lack of negotiations will keep the dollar and gold strong.
Wednesday, 14:00 Beijing time. Much of the UK's high inflation has disappeared, but the last mile of getting price rises down to 2% a year is the most difficult. The UK is expected to report a rise in core consumer price index (CPI) in September, from 3.6% in the previous month, and is unlikely to fall. This will cool market expectations for a rate cut by the Bank of England (BoE) at a time when unemployment is rising.
Pound Sterling (GBP) will rise if inflation data rises; GBP will fall if price rises slow. The data is of concern not just in the UK.
Friday, 20:30 Beijing time. Despite the government shutdown, Bureau of Labor Statistics (BLS) staff have been called back to work to zgykf.cnpile the CPI report. While the Federal Reserve is currently more focused on its employment mandate, inflation is equally critical. The data will be released less than a week before a crucial central bank meeting.
The Federal Reserve focuses on core CPI, excluding volatile energy and food costs, and is expected to increase by 0.3% month-on-month in September, the same as the increase in August. On an annual basis, core CPI is expected to rise 3.1%, also unchanged from last month.
Higher inflation will boost the dollar while weighing on gold and stocks. Slowing price increases would have the opposite effect.
Friday, 21:45 Beijing time. Surveys are considered "soft data" because they are based on expectations rather than what actually happened. In addition, the S&P Global Purchasing Managers Index (PMI) is not as influential as the PMI released by the Institute for Supply Management (ISM). However, these data are for the current month of October and are therefore released early.
The Services PMI was 54.2 in September, reflecting healthy growth in the largest industry in the United States. The manufacturing PMI was 52, which is also higher than the 50 dividing line between expansion and contraction.
If these two figures remain at current levels or higher, investors will be calmer heading into the weekend. A drop towards 50 would weigh on stocks and boost gold.
Market volatility has increased sharply since tensions between China and the United States escalated, and Friday's U.S. CPI release could trigger wild swings. Please use caution when trading.
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