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Investing.com — US Federal Reserve (Fed) officials gather in Jackson Hole, Wyoming for annual central bank social gathering, with speech by Federal Reserve Chairman Jerome Powell being the highlight Ta. The deepening crisis in China’s property sector will continue, but Eurozone and UK PMI figures are likely to get even darker. Here’s what you need to know to start your week.
- jackson hole
Investors will be watching Fed Chairman Jerome’s speech for clarity on the economic outlook and future direction of interest rates.
Powell’s speech is scheduled for Friday at 10:05 a.m. ET, and the minutes of the central bank’s July meeting released last week indicated that most policymakers remain concerned about the upside risk of inflation, suggesting another rate hike. This is done in response to the fact that it was shown that the possibility of
Investors will be watching to see if the Fed president believes further policy tightening is needed to keep inflation down, or if the Fed has made enough progress to keep rates on hold. Market players will also be watching for clues as to whether the Fed is considering a 2024 rate cut outlook.
Traders see an 89% chance that the Fed will keep rates at current levels at its September meeting, according to Investing.com.
- stock market
In the absence of major market triggers, investors will look to Chairman Powell’s speech on Friday for clues on the outlook for interest rates and earnings for chip designer Nvidia (NASDAQ:) due Wednesday.
Nvidia has seen a phenomenal rise in line with the expected growth of artificial intelligence, nearly tripling in value since the beginning of the year.
Wall Street’s three major indexes ended lower last week after a string of strong economic data drove investors’ expectations of rate cuts back and pushed yields on government bonds higher.
Fears of a worsening property crisis in China and its impact on China’s economic slump have also weighed on the market, after beleaguered developer China Evergrande Group (HK:) filed for bankruptcy protection in the U.S. on Thursday. It became a mental burden.
- China’s predicament
China could cut its prime loan rate, or lower mortgage rates, as early as Monday as fears an unprecedented debt crisis is beginning in the real estate sector, which accounts for about a quarter of the economy. There is a growing expectation that there will be It could spill over into the financial system.
China unexpectedly cut several key interest rates last week, but analysts say it has done too little, too late, and stronger action is needed to stem the economy’s downward spiral. ing.
The deepening crisis in the real estate sector and fears of contagion could have destabilizing effects on the world’s second largest economy, already weakened by weak domestic and international demand, slowing factory activity and rising unemployment. have a nature.
- PMI data
The eurozone and UK are set to release PMI data on Wednesday, which could provide insight into whether the European Central Bank will raise rates again in September and whether the Bank of England will opt for a significant rate hike. There is
Eurozone and UK PMIs have fallen in recent months on the back of a sluggish service sector as manufacturing activity has contracted.
ECB President Christine is scheduled to speak at Jackson Hole on Friday with investors looking for clues on the central bank’s next move in September.
Lagarde said in July that the ECB would remain “open-minded” about future interest rate decisions, adding that policymakers “have moved to a data-dependent phase.”
- oil price
Oil prices hit a new all-time high last week as growing concerns over the global demand outlook offset expectations of tighter supplies on the back of production cuts by OPEC+ lynchpin Saudi Arabia and Russia.
The worsening property crisis in China weighed on risk appetite, putting downward pressure on oil prices. Meanwhile, US Treasury yields rose on Wednesday’s Fed minutes, pushing the dollar up for a fifth straight week, weighing on the commodities’ appeal to overseas buyers.
“Investor concerns remain focused on the tension between slowing global growth and still-tight global supply,” Rob Howarth, senior portfolio manager at U.S. Bank Asset Management, told Reuters. Told.
“Prices are likely to stay range-bound for now,” Howarth added, adding that demand has been questioned by investors worried about weak Chinese economic data.
–Reuters contributed to this report
