One week ahead - 16 Sept to 22 Sept
List of major financial events in the week from September 16 to September 20
Economic data
- US retail sales data in August
- US New York Fed manufacturing index in September
- US initial jobless claims last week
- US API/EIA crude oil inventory last week
- Japan's August CPI data
- China's LPR
Financial events
- The three major central banks of the United States, Japan and the United Kingdom announced interest rate decisions
- Federal Reserve Chairman Powell held a monetary policy press conference
- Nadella, Huang Renxun, Su Zifeng and other technology giants will make public appearances
The much-anticipated Fed interest rate decision: 50 basis points or 25 basis points?
In the early morning of Thursday (September 19), the Federal Reserve announced its September interest rate decision, and Federal Reserve Chairman Powell will deliver a speech at 2:30.
At present, the Fed's interest rate cut is almost "certain", but the extent of the rate cut is still uncertain.
The recently released data are "mixed". Whether it is inflation or employment data, there is no "decision" on the extent of interest rate cuts. Wednesday's CPI data showed that inflation is still sticky, raising the probability of a 25 basis point interest rate cut. Thursday's PPI data cooled significantly year-on-year, raising the possibility of a 50 basis point interest rate cut.
On Thursday local time, Wall Street Journal reporter Nick Timiraos, known as the "Fed News Agency", wrote that an interest rate cut starting from 25 basis points is the path of least resistance, which can avoid a large rate cut that triggers market panic and the need to explain a large rate cut before the election. Challenges; but starting with a 50 basis point rate cut can reduce market debate on the extent of subsequent rate cuts.
After the release of Timiraos's article, the market's chances of a September interest rate cut increased significantly, erasing the decline after Wednesday's CPI data.
Bill Dudley, the former "third in command" of the Federal Reserve and former President of the New York Fed, also fueled expectations of a sharp interest rate cut at a forum in Singapore last Friday.
"I think whether they (the Fed) cut rates or not, a 50 basis point cut is well justified."
As of Friday evening local time, traders were betting that the probability of the Federal Reserve cutting interest rates by 50 basis points this week had jumped to 50%, compared with only 15% on Thursday.
As expectations of interest rate cuts are expected to be fulfilled soon, the price of gold broke through a record high last Friday (September 13). The spot gold price once reached US$2,586.09 per ounce. Last week, the price increased by more than US$80, setting a record for the strongest week since 2020. Performance.
Will LPR "cut interest rates" in September?
On Friday (September 20), the Central Bank of China will announce the September LPR quotation.
Pay attention to the timing of the next interest rate hike by the Bank of Japan
On Friday morning (September 20), the Bank of Japan announced its September interest rate decision, and its governor Kazuo Ueda will hold a monetary policy press conference at 14:30.
Market survey results show that slightly more than half of observers believe that the next interest rate hike by the Bank of Japan will be in December, and it is expected that no interest rate hike will be taken at the September meeting. At that time, pay attention to Kazuo Ueda's relevant remarks on the timing of the next interest rate hike when he speaks after the meeting.
However, in a speech last Wednesday (September 11), Junko Nakagawa, a member of the Bank of Japan's board of directors, said that the pace of adjusting the level of monetary easing depends on the economy, inflation and financial conditions. As long as the economic performance meets expectations, the Bank of Japan will continue to adjust its monetary policy.
Currently, traders are assessing the impact of the Bank of Japan's monetary policy and the US presidential debate on the foreign exchange market. Analysts said that if Japan's next interest rate hike is in December, it is expected that the Fed's expected interest rate cut may trigger a sharp rebound in USD/JPY, and the best window for dollar bulls to return to the market will appear before the end of this week.
Nadella and Huang Renxun took the stage one after another
According to the schedule, Microsoft CEO Nadella will host a special event on Monday to discuss "the next stage of Copilot innovation". In the context of Huang Renxun's speech last week and OpenAI's release of the "Strawberry" large model, both of which significantly boosted the sentiment of the US stock market, Nadella's performance will also be closely watched.
Of course, if Nadella disappoints the market. Huang Renxun and Su Zifeng, two AI computing power giants, will also appear at Salesforce's annual event on Tuesday.