Gold 1946,38
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EURUSD 1,1846
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DJIA 27872,50
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OIL.WTI 37,50
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DAX 13183,43
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This week will be full of a number of interesting events, on which further market sentiment will depend. These relate to both the USA and the European Union countries.
USD/JPY
One of the most important events will be the last meeting of the US Federal Reserve before the presidential election. At this meeting, the Fed is expected to clarify some points with regard to interest rates. After all, the new approach to inflation means that interest rates will have to stay low long enough. The US is also expecting data on unemployment benefit claims. The last few weeks have shown that unemployment has stopped declining, which means that the Senate needs to receive a financial aid package faster, which will help the economy recover.
In Europe, all eyes are on Brexit and the upcoming vote in the UK Parliament. Once again, it is impossible to agree on the terms on which Britain will establish trade relations with Europe. Analysts are more inclined that all this will happen on the terms of the World Trade Organisation. The pound suffers from the current situation and loses its position against the dollar with each trading session. Even at the current exchange rate of 1.28, not all possible risks have yet been taken into account.
In Japan, the Liberal Democratic Party will choose the successor to Shinzo Abe. Although there are certain favourites for this position, it is likely that the current financial policy will continue.
There will also be a meeting of the Bank of Japan on 17 September at which further measures will be taken to stimulate the economy. Even though the Bank of Japan has been in the shadows for a while, it has acted with great determination. Its balance sheet has grown by more than 3% of GDP each month and now stands at 128% of the country’s GDP. By comparison, the Fed’s balance is about one-third of GDP and the ECB’s balance is just over 50%. So far, the Japanese Yen has hardly reacted to such changes, but it is a matter of time.
This is a challenging week for the markets, as these key events will make it clear in which direction to go. Volatility is increasing because of uncertainty, and there are fewer reasons for growth. In most cases, in this situation, investors choose to take profits and wait for the best news background.
What awaits us today?
06.30 Volume of industrial production in Japan since the beginning of the year
11.00 Volume of industrial production in the Eurozone since the beginning of the year
12.00 Eurogroup meeting
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