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- New highs or market chaos – the new week 24.09 – 28.09.2018
New highs or market chaos - the new week 24.09 - 28.09.2018
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Loading...After a week in which US stock indices recorded new records, expectations are for a new lucrative week on Wall Street. Dow Jones Industrial Average rose above its highest level since January. Trade tensions between the US and China continue to shake investors after both sides continued to slash with new tariffs earlier this week. The Chinese Ministry of Commerce said on Thursday it hopes that states will show sincerity in trade talks.
The new week provides a bunch of economic news that will be of crucial importance for both the US stock markets and the forex market. Traders will be focused on the Fed's Interest Rate Decision. A hike in interest rates is almost 100% secure. When a country's central bank raises interest rates, it is often considered a bullish signal. Not so much in the United States, where the expectations that the Fed will raise interest rates next week bring with it huge sales signals for the dollar. BNP Paribas Asset Management commented that the dollar may collapse 10% over the next 6 to 9 months, while Invesco Ltd. predict that it will plunge 2% against the euro by the end of the year. Both companies are awaiting the Fed's decision on September 26, and will be following comments on the impact of escalating trade pressures. Both companies are betting that the greenback will also decline due to the monetary equalization between the US and other major competitors. Markets see interest rates rising by 25 basis points next week as almost 100% secure, based on fed fund futures. Thursday's contracts showed more than 45 basis points by the end of 2018. The focus is increasingly shifting to the prospects for the new year. But that alone will not be enough for a significant rise in the dollar, according to Noelle Corum, Portfolio Manager at Invesco Ltd. Global growth is improving and market players are beginning to speculate about a change in ECB and BoJ policies, and this will reduce the dollar's support for Fed promotions.
Why the dollar will turn from a winner to a loser by the end of the year
As the dollar began to gain momentum this year, speculators accrued bullish bets. Those with long-term positions are now the third-largest group of financial markets, according to fund managers surveyed by Bank of America Merrill Lynch Global Research. Still, well-known investors like Ray Dalio, Jeffrey Gundlach and others are beginning to change their views on negative ones, along with others on Wall Street.
Already in the new week, we expect a decision on the basic interest rate in New Zealand. Here, traders do not assign great chances to change the monetary policy of the central bank at this stage. On Thursday, investors will look at the announcement of Gross Domestic Product in the US, with better data there giving a touch of optimism about the bulls of the dollar. On Friday there is Britain's GDP - which will show how the country's economy is showing as Brexit approaches, and the failures of Theresa May and the EU to find a common ground in their talks.
Britain's economy is entering a 'new era' — and it has nothing to do with Brexit
The important economic news for the new week 24.09 - 28.09.2018
Monday
11:00 Germany - Ifo Business Climate
11:30 UK - BoE Financial Stability Report
Tuesday
02:50 Japan - Monetary Policy Meeting
08:30 Japan - BoJ Governor Kuroda Speaks
17:00 USA - CB Consumer Confidence
Wednesday
17:00 USA - New Home Sales
17:30 USA - Crude Oil Inventories
21:00 USA - Fed Interest Rate Decision
Thursday
00:00 New Zealand - RBNZ Interest Rate Decision
11:00 Europe - ECB Economic Bulletin
15:30 USA - Durable Goods Orders
15:30 USA - Gross Domestic Product
17:00 USA - Pending Home Sales
Friday
04:45 China - Manufacturing PMI
09:00 Germany - Retail Sales
11:30 UK - Gross Domestic Product
12:00 Europe - CPI
15:30 Canada - Gross Domestic Product
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