Investing.com - Trade talks between the United States and China are likely dominate market headlines in the week ahead following reports that the two countries are reportedly working on a plan to end their ongoing trade dispute.
U.S.-Sino trade-war fears have been simmering for months, keeping market gains in check with investors jittery over the prospects of further escalation in tensions between the world's two largest economies having an impact on economic growth.
Staying on the trade front, European trade officials will meet their U.S. counterparts in Washington Monday, while U.S. talks are expected to continue with Mexico, with a resolution appearing close in the long-running NAFTA saga.
The turmoil in Turkey, where markets are closed for most of the week for Eid al-Adha, could also remain a focus amid ongoing jitters over a currency crisis there due to a deepening diplomatic rift between Washington and Ankara.
Meanwhile, global financial markets will be fixated on the annual meeting of top central bankers and economists in Jackson Hole, Wyoming, where Fed Chairman Jerome Powell speaks Friday.
There is also the release of the minutes from the Federal Reserve's last meeting on Wednesday.
On the data front, a report on U.S. durable goods orders for July comes out on Friday, which should give further signs on the strength of the American economy at the start of the second half of the year.
Elsewhere, in Europe, market players will eye flash survey data on euro zone business activity for August - the most up-to-date snapshot of activity - to gauge if the region's economy is merely encountering a soft patch or entering a more lasting decline.
Ahead of the coming week, Investing.com has compiled a list of the five biggest events on the economic calendar that are most likely to affect the markets.
1. U.S.-China Trade Talks
A nine-member delegation from Beijing, led by Vice Commerce Minister Wang Shouwen, will hold meetings with U.S. officials led by the Treasury undersecretary, David Malpass, in Washington on Wednesday and Thursday.
The lower-level trade talks offer financial markets a glimmer of hope that the globe's two largest economies could end trade tensions.
Chinese and U.S. negotiators are reportedly working on a plan to hold talks to end a trade dispute that would result in meetings between President Donald Trump and Chinese leader Xi Jinping at a summit in November, the Wall Street Journal reported on Friday.
Washington and Beijing have been locked in escalating rounds of tit-for-tat tariffs since the start of the year, with $34 billion in goods targeted by each country and another $16 billion slated to go into effect this week.
Trump has threatened further tariffs on exports worth as much as $500 billion, as he tries to reduce a trade deficit and protect intellectual property rights.
Recent market action has suggested that so far China has been the big loser from the escalating trade conflict between the world's two largest economies - China's Shanghai Composite has lost around 20% this year, while the Chinese yuan is close to falling below 7.00 per dollar for the first time in over a decade.
The ongoing weakness in the yuan has prompted speculation that policymakers in Beijing are allowing their currency to weaken in order to offset the impact of U.S. trade tariffs.
2. Jackson Hole Summit
An annual meeting of top central bankers and economists hosted by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyoming, is set to take place from Thursday to Saturday, with a keynote speech from Jerome Powell in the spotlight.
Fed chair Powell is due to deliver a speech titled "Monetary Policy in a Changing Economy" at 10:00AM ET Friday.
His comments will be closely watched for fresh policy signals from the world’s most powerful central bank.
In the past, Fed chairs have used speeches at the Kansas Fed-sponsored conference to signal future U.S. central bank policy moves.
3. Fed FOMC Meeting Minutes
The Federal Reserve will release minutes of its most recent policy meeting on Wednesday at 2:00PM ET.
The U.S. central bank held interest rates unchanged as was widely expected following its meeting on August 1 and gave an upbeat assessment of the world's biggest economy, staying on course to gradually lift interest rates.
The Fed has signaled to markets it will hike interest rates two more times this year, in September and December.
Against this backdrop, the U.S. central bank is shrinking its balance sheet by allowing maturing securities to roll off its balance sheet without replacing them.
4. U.S. Durable Goods Orders
The Commerce Department will publish data on durable goods orders for July at 8:30AM ET Friday.
The consensus forecast is that the report will show orders for durable goods declined 0.3% last month, following a gain of 0.8% in June.
Core orders are forecast to rise 0.5%, after increasing 0.2% a month earlier.
Besides the durable goods report, this week's rather light economic calendar also features U.S. data on existing and new home sales.
Economists reckon the data will do little to alter expectations that the Fed will raise rates twice more this year, with the next move higher coming at its September meeting.
Elsewhere, on Wall Street, the second quarter earnings season has wound down, but results are expected from a few mall-based retailers, including Target (NYSE:TGT), TJX (NYSE:TJX), Kohl’s (NYSE:KSS), L Brands (NYSE:LB), Gap (NYSE:GPS), and Foot Locker (NYSE:FL).
5. Flash Euro Zone PMIs
IHS Markit's composite flash Purchasing Managers' Index (PMI) for the euro zone is due at 0800GMT (4:00AM ET) on Thursday, amid expectations for an unchanged reading of 54.3.
The European Central Bank aims to end its bond purchasing program by the end of the year and has signaled a possible interest rate hike next year.
However, worries that growth in the region appears to have peaked, combined with concerns over a trade dispute with the U.S., have brought the ECB pessimists out of the woodwork in recent weeks.
Stay up-to-date on all of this week's economic events by visiting: http://www.investing.com/economic-calendar/
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