Market news | 17 September, 2019

Weekly keys: What is happening this week?

Daniel Luengo Advisory Department

Weekly keys in the form of headlines to keep up to date with what is happening in the markets. Full article in the private area of ​​customers.

The ECB lowers rates and starts a new asset purchase programme. This week it’s the turn of the Fed.

What is happening this week?

Europe

We are paying a lot of attention to the German ZEW economic sentiment index which, after several months in negative territory, last month fell to -44 points, levels not seen since 2011, in the worst moments of the euro area crisis. The market expects a slight recovery to -38 points, but still at very depressed levels. This is understandable to some extent, as Germany has been flirting with recession for some time now and a third-quarter of negative GDP growth would see it technically enter it.

As for the UK, we are keeping an eye on the BoE meeting and retail sales figures. The depreciation seen in the pound over recent months has given some respite to the British central bank, but in recent days we have seen the GBP/EUR recover to some extent, which could add greater deflationary pressure. Retail sales for August could also be a good thermometer for measuring the health of the UK economy, after having surprisingly increased for several months; though not at excessively high levels.

USA

It’s the Fed’s turn this week. The markets seem to have clearly discounted a rate cut of 25 basis points. And as we already know the Fed does not like to surprise the market but prefers to prepare it.

For this reason, more important than what it happens in this meeting is the statement afterwards, the FOMC’s outlook for the economy in general and its forecasts of future rate reductions or even unconventional measures.

Global

The events of the last few hours in Saudi Arabia will undoubtedly set the tone for the next few days globally. Iran’s possible involvement in the attacks on Saudi oil deposits would put further pressure on a country that is already under U.S. embargoes.

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