Week Ahead: Traders To Watch the Fed Decision, US GDP, Trade Conflict, and China Manufacturing
September 24, 2018 2:41 pm
This week, trade will be one of the most important topics in the financial markets. This is because traders will pay close attention to the new developments in the market after the decision by China to abandon all trade talks with the US. This decision came after the US issued sanctions on China for military purchases from Russia. The decision is intended to influence the voters who will go to vote in the mid-term elections. China hopes that democrats will win the house and the senate to bring a moderating force to the Trump administration.
Equally important will be the Federal Reserve interest rates decision on Wednesday. This will be a major decision because the Fed is expected to provide forward guidance to December’s rate hike. The Fed is expected to have a hike this week but the outlook for a December hike is clouded in mystery. Some Fed officials have cautioned against further hikes because of its dangers in inverting the treasury yield curve. As a result, the forward futures in the CME place the probability for a rate hike at below 65%.
This decision will be followed by the release of GDP numbers for the second quarter. This will be the final reading. In July, the department of commerce showed that the GDP expanded by 4.1%. This was revised higher to 4.2% in August. This week, traders expect the data to show that the economy expanded by 4.2%. An increase above this will be good news for the US economy. This is because it will be the highest level since 2014. The GDP price index is expected to be at 3.0%, which will be slightly lower than the previous 3.2%.
The Fed decision will be followed by the decision of the Reserve Bank of New Zealand (RBNZ). The bank is expected to leave interest rates unchanged at 1.75%. In recent weeks, data from New Zealand has been supportive of the loonie, which has gained significantly against the US dollar. Traders will pay close attention to the statement and the press conference that will follow the decision.
On Friday, we will receive the minutes of the recent Bank of Japan (BOJ) monetary policy meeting. In the meeting, the bank committed itself to continue the accommodative policy despite the recent positive economic data from the country. At the same time, we will receive the inflation data from Tokyo and the employment numbers for the country. We will also receive the employment numbers from Germany, the CPI from the EU, and the GDP numbers from the UK. Finally, we will receive the GDP numbers from Canada. The final reading is expected to show that the economy expanded by 2.4% in the second quarter.
Brexit will continue to be a major topic this week. This will be after the decision by the EU to reject the proposals made by Theresa May on Friday last week. This was a major setback for free traders who hope that a deal between the EU and UK will happen.
Other major data expected this week will be: Caixin Manufacturing PMI for China, Japan industrial production, US pending home sales, EU business confidence, and US consumer confidence.
This week, trade will be one of the most important topics in the financial markets. This is because traders will pay close attention to the new developments in the market after the decision by China to abandon all trade talks with the US. This decision came after the US issued sanctions on China for military purchases from Russia. The decision is intended to influence the voters who will go to vote in the mid-term elections. China hopes that democrats will win the house and the senate to bring a moderating force to the Trump administration.
Equally important will be the Federal Reserve interest rates decision on Wednesday. This will be a major decision because the Fed is expected to provide forward guidance to December’s rate hike. The Fed is expected to have a hike this week but the outlook for a December hike is clouded in mystery. Some Fed officials have cautioned against further hikes because of its dangers in inverting the treasury yield curve. As a result, the forward futures in the CME place the probability for a rate hike at below 65%.
This decision will be followed by the release of GDP numbers for the second quarter. This will be the final reading. In July, the department of commerce showed that the GDP expanded by 4.1%. This was revised higher to 4.2% in August. This week, traders expect the data to show that the economy expanded by 4.2%. An increase above this will be good news for the US economy. This is because it will be the highest level since 2014. The GDP price index is expected to be at 3.0%, which will be slightly lower than the previous 3.2%.
The Fed decision will be followed by the decision of the Reserve Bank of New Zealand (RBNZ). The bank is expected to leave interest rates unchanged at 1.75%. In recent weeks, data from New Zealand has been supportive of the loonie, which has gained significantly against the US dollar. Traders will pay close attention to the statement and the press conference that will follow the decision.
On Friday, we will receive the minutes of the recent Bank of Japan (BOJ) monetary policy meeting. In the meeting, the bank committed itself to continue the accommodative policy despite the recent positive economic data from the country. At the same time, we will receive the inflation data from Tokyo and the employment numbers for the country. We will also receive the employment numbers from Germany, the CPI from the EU, and the GDP numbers from the UK. Finally, we will receive the GDP numbers from Canada. The final reading is expected to show that the economy expanded by 2.4% in the second quarter.
Brexit will continue to be a major topic this week. This will be after the decision by the EU to reject the proposals made by Theresa May on Friday last week. This was a major setback for free traders who hope that a deal between the EU and UK will happen.
Other major data expected this week will be: Caixin Manufacturing PMI for China, Japan industrial production, US pending home sales, EU business confidence, and US consumer confidence.
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