Get 40% Off
These stocks are up over 10% post earnings. Did you spot the buying opportunity? Our AI did.Read how

Marketmind: British CPI first, then it's over to Jerome

Published 09/20/2023, 12:32 AM
Updated 09/20/2023, 12:40 AM
© Reuters. FILE PHOTO: Clubcard branding is seen next to shoppers inside a branch of a Tesco Extra Supermarket in London, Britain, February 10, 2022. REUTERS/Paul Childs

A look at the day ahead in European and global markets from Tom Westbrook

Jerome Powell has a needle to thread today between markets eager to call a peak in interest rates and the rising energy costs that are leading an unwelcome comeback in inflation.

If Fed members also stick with June projections for rate cuts in 2024, then his explanation job gets even trickier as he will be pressed to lay out the conditions for bringing rates down, all while leaving himself a free hand to raise them if need be.

Markets expect the Fed to keep rates on hold, but have priced about a 40% chance of another hike by year's end.

Canada's bigger-than-expected bounce in consumer prices, driven by surging gasoline costs, might provide handy evidence for the Fed to err on the restrictive side of rates settings.

Markets have roughly doubled the likely risk of a hike in Canada to about 40% after annual headline inflation jumped to 4% in August from 3.3% a month earlier.

Higher energy prices could also drive a surprise in British CPI at 0600 GMT, where economists see the year-on-year headline figure rising to 7% in August from 6.8% in July.

Sterling has found support from the risk of a hot reading, with a 32% rise in Brent crude futures over the past three months pointing to upside risks and more chance the Bank of England hikes rates beyond an expected rise on Thursday.

Investors were playing a waiting game in Asia. Stocks drifted lower. China declined to cut rates, weighing on Chinese stocks, while currency trade was in a holding pattern. [FRX/]

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Chinese developers Sunac and Country Garden brought some relief to the crisis-hit property sector by forging debt deals with creditors, but the outlook remained clouded by uncertainty about a recovery in home sales.

It's over to you, Jerome.

Key developments that could influence markets on Wednesday:

British CPI

Federal Reserve policy decision and press conference

Latest comments

First rate pause prediction.....now fast forward to rate cut prediction......who needs the Fed and fundamentals to dictate the economy direction when IBs are hiring circus fortune tellers to decide in advance......
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.