Market Focus – US PPI, BoE Monetary Policy Meeting and China Data
Equity Markets were mostly lower last week. Investors remained cautious and even risk averse after North Korea’s Hydrogen Bomb Test. The horrific damage to the Caribbean Islands from Hurricane Irma on the heels of Hurricane Harvey. More doubts are building about whether the Federal Reserve will be able to lift rates again this year. The Fed’s most recent economic projections in June suggest a third rate increase in 2017. Central Bankers will update their projections when they meet later this month. That will offer clues about the Fed’s plans for raising rates. At the meeting, the Fed is also expected to lay out a plan to start shrinking the Balance Sheet.
In addition to the Bank of England’s Monetary Policy Meeting Thursday, the Swiss National Bank gives its quarterly Monetary Policy Assessment. UK Inflation accelerated in August, more than expected. Core Inflation also rose, adding to the Policy headache facing the Bank of England ahead of Thursday’s Monetary Policy meeting. In Asia, Investors will continue to monitor Data from China with key Industrial Production and Retail Sales Data scheduled to be released later today.
Gold may have inverted its Cycle i.e.high instead of low due to a strong seasonal influence. The Cycles Model suggests a probable decline over the next two weeks. Gold held near its highest in more than a year last Friday