This week, UK prime minister Boris Johnson heads off to New York for a meeting of the United Nations General Assembly and also for meetings with key European leaders and US President Trump.
In the UK, The Supreme Court will perhaps decide whether certain aspects of the proroguing of parliament were unlawful. US/ China trade tensions and Middle Eastern tensions are ever-present themes which continue to dominate markets.
Several central bankers will give speeches, the Reserve Bank of New Zealand will announce its interest rate decision and we have US consumer confidence numbers, US 2nd quarter GDP, and we look forward to Core Personal Consumption Expenditure figures (the Fed’s preferred measure of inflation).
What I found interesting about last week’s FOMC US interest rate decision was that despite cutting US interest rates by a quarter of one percent, the majority of the committee now seems to be of the opinion that the cut is sufficient for the moment and that they can get back to their mandate of looking at the data, principally for inflation and employment. There also seemed to be some pushback by Fed Chair Powell against the policies and constant haranguing of US president Trump. Perhaps the committee is winding down the clock in anticipation of next year’s elections and perhaps sensing that the president will be moderate or look for alternative sources for venting his rancor in the future.
That said, over the coming days and next week, we have some essential data for the FOMC to cogitate over insofar as we have US 2nd quarter GDP on Tuesday ( expected at 2.0% Q/Q) and Core PCE on Friday, expected at 1.8% Y/Y for August. Next week ADP and Non- Farm payrolls should both print positive numbers in the region of 150,000. US Consumer Confidence on Tuesday has surprised to the upside for the last two readings and the September gauge is expected to read 133.
A Fed on pause gives breathing space for other central bankers not to cut in tandem. Of these, I note that Australian and New Zealand bankers should be sighing with relief. The Reserve bank of New Zealand will likely keep New Zealand interest rates on hold on Tuesday and I feel that both Australia and New Zealand have interest rates at a level which has the potential to put some real stimulus into their relative economies.
Central bankers on stage include BOJ Governor Kuroda and RBA Governor Lowe on Tuesday, and BOJ Governor Kuroda, ECB President Draghi, and BOE Governor Carney on Thursday.
As ever the World waits for the US and to dance to the music of its one-man-band.
Last Good luck and good trading! Ben Robson
Ben Robson is the CEO of Spectrex Commodities and author of Currency Kings- How Billionaire Traders Made Their Fortune Trading Forex And How You Can Too.
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