Economic Update

Stay up to date with relevant economic news

China fears dominate markets

Markets opening lower: wary of China and most particularly Evergrande (China’s second largest real estate company) which is struggling to meet its debt funding obligations. This, coupled with very poor retail sales last week and other economic data at the bottom end of expectations is starting to worry markets and world growth.

These fears have given the FEDs decision and likely tapering decision more focus, and in turn have given a fillip to the USD and “safe haven” assets. But the USA economy is not without its worries as COVID cases are not falling and the housing market is lacking confidence.

The week holds several rate decisions: FED, Bank of England and Bank of Japan although the markets appear to be comfortable that it knows the outcome of all three, so any surprises are likely to be met with high volatility.

Elections are also on the horizon for Germany and Canada with the former looking as though a more left-of-centre government will be ushered in and this concern is weighing on the Euro . In Canada the incumbent Liberals are likely to win but the election was brought to bolster their numbers however the electorate seem to have other ideas.

Commodities are mixed; aluminium remains in short supply and thus its price supported but copper has dropped over the week on growth fears and China holiday. Oil held most of its gains buoyed by sharply lower inventories and related retail sales data.

Platinum and palladium both slid on reduced output from the automakers as the continuing chip shortage impacts production.

Date

Country

Figures

Expected

Previous

Sep 20

GBP

PSBR

£11.03B

£9.61B

Sep 22

USA

FOMC Interest Rate Decision

 

0.25%

Sep 23

EUR

Markit Manufacturing PMI

62.2

61.4

 

GBP

Markit Manufacturing PMI

0.5%

-0.3%

 

GBP

BoE rate decision

 

 

 

USA

Initial Jobless Claims

 

332k

 

USA

Markit Manufacturing PMI

58.3

55.4

DISCLAIMER – Do not rely on information contained in this Market Commentary.


The content of this Market Commentary is provided for general information only. It is not intended to amount to advice on which you should rely. In particular, neither this Market Commentary nor any other content of our website should be construed as investment advice. The information contained in this Market Commentary is not, and should not be read as, an offer, recommendation or inducement to engage in investment activity. In no event shall we be liable for any damages resulting from reliance on or use of any information contained in this Market Commentary. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this Market Commentary. 

Although we make reasonable efforts to ensure that that the information in this Market Commentary is accurate as at the date on which it is published, we make no representations, warranties or guarantees, whether express or implied, that it is accurate, complete or up to date.

Get In Touch

Contact us for more information