Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

End of the summer: Events that may shake markets in September

Economy Sep 06, 2021 02:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: The Federal Reserve building is set against a blue sky in Washington, U.S., May 1, 2020. REUTERS/Kevin Lamarque
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio

LONDON (Reuters) - After a summer in which stocks have hit a seemingly never-ending run of record highs, September brings a series of monetary and political events that could jolt investors out of their complacency.

The will-they-won't-they debate over trimming pandemic-era stimulus gets an airing with several G10 central banks holding meetings. A showdown over U.S. national debt alongside crucial elections in Japan and Germany add to the risks.

Here are eight events, listed chronologically, which investors will watch in September:


The Reserve Bank of Australia meets on Tuesday and provides September's first test of central banks' determination to stick with plans to cut stimulus.

Last month, it stuck with plans to reduced weekly bond buying to A$4 billion ($2.9 billion) in September from the previous A$5 billion.

Yet the rapid spread of the Delta variant and a slowing economy are piling pressure on the RBA to delay the tapering -- or even to go into reverse and ease again.

Graphic - Australian unemployment and interest rates:


Thursday's European Central Bank meeting could be a lively affair. ECB policy hawks have been out in force, arguing now is the time to start debating the end of a stimulus scheme.

The ECB might opt to slow the pace of purchases but chief Christine Lagarde will likely stress this is not the same as tapering.

Communicating that will not be easy. The risk is markets interpret such a step as hawkish -- lifting the euro and sovereign borrowing costs.

Graphic - ECB hawks put markets on alert:


Canadian Prime Minister Justin Trudeau called a snap vote two years early and now faces a tight race.

Trudeau is hoping his management of the pandemic and vaccine rollout will deliver him a majority, but polls show his Liberals in a statistical tie with Erin O'Toole's Conservatives.

Canadian elections rarely register for global markets, but with the Liberals proposing tax hikes on big banks and both candidates proposing spending increases, this one will be watched closely.

Graphic - Canada Election: Poll Tracker -


Weak August U.S. payrolls have not entirely derailed expectations the Federal Reserve might announce a taper timeline at its September meeting. But with a year-end start to the taper mostly priced in, focus is shifting to when interest rates may rise.

Fed boss Jerome Powell could stress again that tapering and rate increases are separate and that he regards current inflation spikes as transitory.

Fed fund futures are pricing the first hike for early 2023. And we should also know by the meeting whether it will be Powell who presses the button on that rise -- his term expires in February 2022. Ninety percent of economists polled by Reuters expect his tenure to be extended.

Graphic - Fed balance sheet:


Norway is set to raise interest off 0%, becoming the first of the G10 group of developed economies to do so.

A rate hike will demonstrate its willingness to look beyond rising COVID-19 infections and to focus on a strongly recovering economy.

Investors expect the rise, but confirmation that a major central bank is actually tightening rather than just talking about it -- especially after New Zealand unexpectedly baulked at raising in August -- would still mark a significant moment for markets hooked on cheap cash.


Western Europe's longest-ruling incumbent leader, Angela Merkel, steps down as German chancellor after 16 years in charge and four straight election victories.

The election has a wider-than-usual range of possible outcomes, especially as the centre-left Social Democrats are leading in the opinion polls, pulling ahead of Merkel's conservatives for the first time in 15 years.

Two key questions for markets -- what will a new government mean for fiscal policy at home and at the European level? And what does it mean for European integration?

Graphic - German Social Democrats lead in the opinion polls:


Prime Minister Yoshihide Suga's decision to resign has given a surprise twist to Japanese politics.

Amid a wave of COVID-19 infections, Suga's popularity had sunk but there is no frontrunner in the race to succeed him as chief of the ruling Liberal Democratic Party.

Possibles include ex-foreign minister Fumio Kishida and the popular minister in charge of Japan's vaccination rollout, Taro Kono. Whoever triumphs is assured to become premier given the party's majority in parliament's lower chamber.

The contest is slated for Sept. 29, and the winner must call the general election by Nov. 28.

Graphic - Japan's accelerating COVID-19 cases:


The U.S. Treasury technically hit its $28 trillion debt "ceiling" a month ago but by dipping into its bank accounts, it has postponed the day it runs out of borrowing room. Yet the day will soon come -- probably in October -- when it lacks the money to pay its obligations.

To prevent a government shutdown or worse, a technical default, Congress must this month raise or suspend that limit. Republican senators, opposed to the Democrats' $3.5 trillion infrastructure plan, have vowed to vote against raising the ceiling.

Back in 2011 the debt ceiling bickering induced S&P Global (NYSE:SPGI) to cut U.S. credit ratings to AA+ from AAA. Fitch might do the same this time, leaving the United States with only a Moody's (NYSE:MCO) triple-A rating.

While there is no sign bond markets are pricing in a risk of default, that could change. In the words of NatWest analysts, it "sets up a September to remember in DC".

Graphic - Debt ceiling:



End of the summer: Events that may shake markets in September

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email