Last week, markets experienced a solid rebound, with major indices such as the S&P 500 and Nasdaq posting significant gains, recovering from the previous week's losses. However, concerns about a slowing economy and persistent inflation continue to stir market volatility.
This week, all eyes are on the US Federal Reserve's interest rate decision, which is expected to be a major influence on market sentiment. Additionally, global macroeconomic data and the actions of foreign investors will play a crucial role in shaping market trends.
Keep an eye on the key releases ahead.
🇺🇸 Retail Sales m/m — September 17, at 15:30 GMT+3
This key report will shed light on consumer spending trends, covering a range of durable and non-durable goods. As a leading indicator, Retail Sales offers a glimpse into the current quarter's economic growth and highlights potential inflationary pressures on the demand side.
The forecast for August sits at 0.9%, slightly down from the previous month's 1.0%. This data release could significantly impact the $EURUSD pair and major market indices, reflecting shifts in consumer confidence and spending behavior.
🇬🇧 CPI and Core CPI m/m — September 18, at 09:00 GMT+3
The forecast for the Consumer Price Index (CPI) stands at a modest 0.1%, signaling a potential slowdown in price growth. This report is critical as it reflects the cost of living and purchasing power, directly influencing the Bank of England's policy decisions. A lower-than-expected reading could add pressure on the GBP, potentially shaking up the $GBPUSD pair. Conversely, a surprise uptick might boost expectations of future rate hikes, sparking volatility in the market.
🇪🇺 CPI and Core CPI m/m — September 18, at 12:00 GMT+3
Next on traders' radar is the UK inflation report, with CPI and Core CPI data set to be released this Tuesday. The forecast for August sits at a modest 0.1%, indicating a possible slowdown in price growth. This release will be key for those tracking the BoE’s next steps, especially after the recent rate decisions. Any surprises in the data could shift sentiment around the DAX and $EURUSD, influencing short-term trading strategies.
🇺🇸 Fed Interest Rate Decision — September 18, at 21:00 GMT+3
The Federal Reserve is set to announce its first interest rate cut since 2020, a move that has been highly anticipated by the markets. The central focus will be on whether the cut will be by 25 or 50 basis points. This decision comes at a critical juncture, less than two months before the U.S. presidential election, and could signal a shift in the Fed's approach to supporting the economy.
A rate cut, especially the first in over four years, can have a mixed impact on the stock market. On one hand, lower interest rates generally boost stocks as borrowing costs decrease and consumer spending potentially increases. On the other hand, the Dow Jones ($US30), Nasdaq ($NAS100), and S&P 500 ($SPX500) might react negatively if the cut is seen as a signal that the economy is weakening more than expected.
🇬🇧 BoE Interest Rate Decision — September 19, at 14:00 GMT+3
While an interest rate cut from the Bank of England this week appears unlikely, investors will closely monitor the September meeting for hints about future monetary policy and the pace of bond sales — a topic currently under political scrutiny. According to a Reuters poll, all 65 surveyed economists expect the BoE to maintain rates at 5.0%, following a reduction from the 16-year high of 5.25% in August.
The $GBPUSD pair will be in focus, with the potential to move closer to the mid-1.3100s depending on the BoE's stance and any signals regarding future rate adjustments.
That's it for this week! 👋
