Macroeconomic/ geopolitical developments
- Ongoing growth and inflation concerns have left global financial markets in “risk off” mode, and still vulnerable to further erratic, “risk off” moves.
- Growth concerns have been sparked by three main factors:
- ongoing supply chain worries fuelling inflation fears
- Inflation worries putting the spotlight on Central Banks and in particular the Fed and the possible removal of the super easy monetary policy
- The ongoing global spread of the COVID-19 Delta variant (and worries about new variants, with the Mu variant being closely monitored)
- Given inflation concerns are high, the lower-than-expected US CPI data last week (4.0% with consensus around 4.2%), did little to calm market worries.
- Inflation in the UK leapt to 3.2% in August, its highest level in over nine years.
- Philip Lane, the European Central Bank (ECB) Chief Economist was reported as saying he expects the ECB 2% inflation target to be hit by 2025, meaning that Eurozone interest rates could be on the rise by 2023.
Global financial market developments
- Global shares indices saw deeper setbacks from recovery/ record peaks, with European indices again leading global averages lower.
- The US Dollar once again rallied in the “risk off” environment
- EURUSD dipped further and GBPUSD remains vulnerable.
- Gold fell again with the stronger US Dollar, undoing the recent recovery.
- Oil extended its strong advance from late August.
- The Copper rebound is fading.
Key this week
- Geopolitics:
- Still monitoring the impact of the global spread of the COVID-19 Delta variant and watching for developments with the Mu variant.
- Checking for possible new national lockdown restrictions or for further global lockdown easings.
- Central Bank Watch: Reserve Bank of Australia (RBA) Meeting Minutes are released on Tuesday, we get both the Bank of Japan (BoJ) and US Federal Open Market Committee (FOMC) interest rate decisions, statements and press conferences on Wednesday and the same from the Bank of England (BoE) on Thursday.
- Macroeconomic data: The data standouts this week are the global Markit Manufacturing and Services Flash PMIs released on Thursday.
| Date | Key Macroeconomic Events |
| 20/09/21 | Nothing of note |
| 21/09/21 | RBA Meeting Minutes |
| 22/09/21 | BoJ and US FOMC interest rate decisions, statements and press conferences |
| 23/09/21 | Global Markit Manufacturing and Services Flash PMI; BoE interest rate decision, statement and press conference; Canadian Retail Sales |
| 24/10/21 | Japan CPI; German IFO Business Climate |
