Take Five: Shaky September
Aug 30 (Reuters) -U.S. jobs numbers dominate the agenda as markets brace for a choppy September, with France seeking a way through its political mess, Germany poised for regional polls and African leaders heading to Beijing.
Here's your guide to the week ahead in financial markets from Kevin Buckland in Tokyo, Ira Iosebashvili in New York, Duncan Miriri in Nairobi and Dhara Ranasinghe and Naomi Rovnick in London.
1/ LABOUR OF LOVE
With the Federal Reserve on the cusp of monetary policy easing for the first time in years, attention turns to the Sept. 6 U.S. employment data for clues on how aggressively the Fed might move in coming months.
Fed Chair Jerome Powell flagged it was time to start reducing interest rates, and many in the markets expect the process to begin with a 25 basis point cut at the Sept. 17-18 meeting.
Further signs of the labour market weakness that helped to roil markets in late July and early August could revive recession fears and cause investors to dump riskier assets.
Expectations of heftier rate cuts have dented the dollar, which is hovering around one-year lows, in part on expectations that imminent monetary policy easing will narrow the yield advantage the U.S. has over many developed economies.
2/ VOLATILITY
Global stocks have bounced back to near-record highs after an early August swoon driven by a Bank of Japan interest rate hike causing a feedback loop of selling and volatility. There could be more trouble ahead.
Bank of America analysts say stock market volatility tends to rise in September and October. Citi strategists reckon market expectations of future stock market swings .VIX are too low.
August's selloff was ignited as carry trades that gambled on U.S. rates staying far higher than Japan's imploded. Unsuccessful speculators sold other assets to cover losses, helping to wipe about $1 trillion off U.S. tech stocks.
Markets have since moved to a view that Fed rate cuts will support stocks and bonds, but data surprises could disrupt currency markets and potentially cause further cross-asset shocks.
3/ CHILL IN THE AIR
Summer has ended abruptly in France. Having successfully hosted the Olympics, France needs a government, and the focus has returned to President Emmanuel Macron's political crisis.
Socialists and Greens say they will not participate in further talks with Macron, who has slammed the door on a potential leftist government.
Investors, waiting for progress, are shunning French stocks. The CAC index remains 5% below levels seen in June before Macron announced a snap election and has hardly risen this year, while German shares have rallied 12%.
Germany has problems of its own. Two east German states hold elections on Sept. 1 that could shake up politics before 2025's federal election. Populist parties should do well, while the economy is weak, shrinking 0.1% in Q2. The Ifo Institute president says the economy is increasingly falling into crisis.
The markets' current focus on France, could soon shift to Germany.
4/ UNDAUNTED HAWKS
Bank of Japan officials have not shied away from further rate hikes despite the August market ructions as BOJ chief Kazuo Ueda's sharp hawkish shift collided with U.S. recession worries and an aggressive unwind of bets against the yen and global stocks sell-off.
Deputy Governor Ryozo Himino echoed his boss by saying monetary tightening would continue if inflation evolves as the BOJ expects and markets need to be monitored closely.
The course for consumer prices is far from clear though: Tokyo CPI, a bellwether for the nationwide figure, accelerated to 2.4% in August, above the BoJ's 2% target. The closely watched core-core measure excluding fresh food and energy came in at just 1.3%.
Retail sales figures published at the end of August fell short of estimates, while household spending has declined every month since February last year. An update of that series is due on Sept. 6.
5/ AFRICAN LEADERS HEAD TO CHINA
African government officials, including presidents and prime ministers from countries including Kenya, Senegal and South Africa head to Beijing for the ninth edition of the Forum on China-Africa Cooperation.
The once-every-three-years meeting - the main summit of engagement between both sides - follows data that showed annual Chinese lending to the continent rose to $4.6 billion last year - the first increase since 2016.
However, the figure is far from the peak 2012-2018 levels of more than $10 billion at the height of the Belt and Road Initiative. The decline has been caused by China's own domestic pressures and debt problems among African economies, such as Ethiopia, Kenya and Zambia.
African officials will be keen to seek commitments from Beijing on boosting financing and investments, while Ethiopia, for instance, will focus on debt restructuring talks.
US dollar slumps to 13-month low as Fed signals rate cut US dollar slumps to 13-month low as Fed signals rate cut https://reut.rs/3MmUIw9
Market volatility has eased after early August spike https://reut.rs/3MKrtDT
Political uncertainty unsettles France's stock market https://reut.rs/4cJu0sp
Revival of animal spirits remains in question Revival of animal spirits remains in question https://reut.rs/3z8VFVL
China's loans to Africa rise in 2023 https://reut.rs/3yZjZJH
Graphics by Sumanta Sen, Vineet Sachdev, Pasit Kongkunakornkul, Prinz Magtulis and Kripa Jayaram; Compiled by Karin Strohecker; editing by Barbara Lewis
متعلقہ اثاثے
تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
