09/09/2024
Written by: Ian Morley
Summary:
After a volatile start to last week, markets found some stability as better-than-expected US jobs data helped recover a portion of earlier losses. The earlier calls for an emergency Federal Reserve rate cut have subsided, with market expectations for a 0.50% reduction at the next FOMC meeting now down to 50%, from a prior 100%.
This week could be critical for shaping future monetary policies in both the UK and the US, as a series of key economic indicators are set to be released. In the US, year-on-year inflation is anticipated to show a slight decline, while Monthly Retail Sales are expected to bounce back from the previous month’s stagnant figures.
In the UK, the Unemployment Rate is forecasted to rise marginally, and the Headline Inflation Rate is expected to increase to 2.3%, up from the previous month’s 2%.
Speeches:
Market Insight:
Market volatility could re-emerge this week, with the upcoming release of the US inflation report on Wednesday and Retail Sales data on Thursday. Amid growing concerns of a looming US recession, persistently high inflation and weaker retail sales could drive equity markets down again and heighten the probability of a 50bps interest rate cut at the next Federal Reserve meeting.
In the UK, significant economic data, including updates on Employment, Inflation, and Retail Sales, is due for release. Meanwhile, in US politics, Kamala Harris is gaining momentum against Donald Trump in the run-up to the presidential election, with recent polls showing the Democrats leading in key battleground states.
Geopolitical tensions continue to impact markets, as the Israeli Defence Minister informed the US that Iran is allegedly preparing for a large-scale assault on Israel. In response, the Pentagon announced the deployment of US Strike groups to the region.