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Fed, BoE and BoJ take centre stage amid inflation concerns

Central bank decisions dominate markets this week as policymakers respond to renewed inflation pressure from the energy shock driven by the Iran conflict. The Federal Reserve (Fed) announces its interest rate decision on Wednesday alongside updated economic projections, followed by the Bank of England on Thursday. The Bank of Japan concludes the week’s major policy meetings on Friday, when it also publishes its monetary policy statement. Inflation data are due from the UK on Wednesday, the euro area on Thursday and Japan on Friday. Markets will also assess Chinese industrial production and unemployment figures on Tuesday, as well as US retail sales on Wednesday, for signals about the health of the global economy.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

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Oil prices rose sharply on Monday after further Houthi attacks on Saudi Arabian targets and shipping in the Bab el-Mandeb Strait heightened concerns about supply disruptions. Brent crude oil futures rose 2.1% to USD 106.83 per barrel, while West Texas Intermediate (WTI) futures increased 2.3% to USD 102.36 per barrel. Saudi Arabia shut a key East-West pipeline after the attacks, limiting its ability to divert exports if conditions in the Strait of Hormuz worsen. Planned talks between Iran and Gulf states over Hormuz were postponed indefinitely on Sunday, leaving oil flows through the waterway at a fraction of pre-conflict levels following renewed US-Iran hostilities in August. Meanwhile, gold prices fell, declining 0.4% to around USD 4330 per ounce, extending a 1.8% fall last week. Bitcoin rose 0.4% to around USD 77,600.

Asian stocks retreat as AI concerns grow

Asian equities fell on Monday as calls from leading artificial intelligence companies to slow development of advanced models prompted investors to reassess spending and earnings expectations across the technology supply chain. Korea’s KOSPI declined 3.3%, Japan’s Nikkei 225 fell 0.8%, while Hong Kong’s Hang Seng Index gained 0.2% to 24,856 points, with SK Hynix, Samsung Electronics and SoftBank contributing to losses. Australia’s S&P/ASX 200 was essentially flat, while mainland China’s CSI 300 fell 0.7%.

US stocks recover despite persistent inflation

US equities rose on Friday, despite inflation concerns. The Dow Jones Industrial Average gained 1% to 52,573.29 points, while the S&P 500 rose 0.9% to 7,656.98 points and the Nasdaq-100 advanced 0.9% to 29,368.44 points. US core consumer prices rose 0.3% in August from July, exceeding expectations, while annual core inflation eased to 2.4% from 2.5% in July, data released on Friday showed. Headline inflation accelerated to 3.4% year-on-year and 0.4% month-on-month, partly reflecting the return of oil prices towards USD 100 per barrel. Markets now see a 90% probability that the Fed will raise interest rates at its policy meeting next Wednesday, as Fed Chair Kevin Warsh has said inflation remains too high.

US consumer sentiment plunges

The University of Michigan’s consumer sentiment index fell 7.5% from August to 47.8 in September, its second-lowest reading since records began in 1952, data released on Friday showed. The index was 13.2% below its level a year earlier as expectations for personal finances and business conditions deteriorated. One-year inflation expectations rose to 4.6%, their highest level since June, as petrol prices increased 3.9% in August and 27.4% year-on-year.

European equities recover as oil retreats

European equities recovered on Friday with the EuroStoxx 50 gaining 0.9% to 6325.13 points but ended last week down more than 1%. Germany’s DAX rose 0.8% to 25,568.56 points, France’s CAC 40 gained 0.8% to 8179.77 points and the Swiss Market Index added 0.3% to 13,775.27 points. In macroeconomic data, UK gross domestic product grew 0.4% in July, accelerating from 0.3% in June and exceeding market expectations, according to figures released on Friday.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: Swiss Producer and Import Price Index (08:30), Canadian Consumer Price Index (14:30).

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