LGT Navigator

After turbulent days, the focus is now on US inflation data

Following last week's turbulence, stock markets are looking for fresh impetus. The upcoming US producer (Tuesday) and consumer prices (Wednesday) will therefore take centre stage this week. A majority of analysts expect a moderate decline in the annual US inflation rate. However, some members of the Federal Reserve have recently been rather cautious about the first interest rate easing in September anticipated by the markets. 

Date
Auteur
Alessandro Fezzi, LGT Research Content & Publications
Temps de lecture
5 minutes

Inflation shown with icons

The Asia-Pacific stock markets were mostly up at the start of the week after experiencing a rollercoaster ride last week. However, the stock exchanges in Japan, which recorded the biggest slump last week, were closed for a public holiday. The South Korean Kospi rose by just under 1% on Monday, while the small-cap Kosdaq gained 0.8%. The Chinese CSI 300 remained unchanged, while Hong Kong's Hang Seng Index fell by around 0.1%. In Sydney, the S&P/ASX 200 traded almost 0.5% higher.

In New York, a difficult week came to an end on Friday. The Dow Jones Industrial closed only slightly higher (+0.1%) at 39,497.54 points, after opening the week at its lowest level since mid-June in the face of recession worries. At the end of the week, the index was down a moderate 0.6%. The S&P 500 gained just under 0.5% on Friday and ended trading at 5344.16 points. On the Nasdaq technology exchange, the indices rose by a good 0.5%. The markets are now likely to be looking for new directional impulses. Inflation data from the US will be a first point of reference.

The yield on ten-year US government bonds remains below the 4% mark - currently at 3.94%. The euro was able to hold its ground against the US dollar just above 1.09.

Latest polls on the presidential election: Harris leads in three key states 

New polls in Michigan, Wisconsin and Pennsylvania confirm continued momentum for Democratic presidential candidate Kamala Harris. Accordingly, she is ahead of Trump in the contested states. This is the result of new polls by the New York Times and Siena College. Harris intends to present her economic policy programme this week and has also stated that she will not interfere in the decisions of the Federal Reserve if she becomes president.

Fed rate hike in September does not yet appear to be a foregone conclusion

Some members of the US Federal Reserve are still cautious about the Fed's first interest rate easing, which has been firmly pencilled in on the capital markets. Tom Barkin, President of the Richmond Fed, believes that a further cooling of inflation in the US is likely, but the Fed will have to wait and see whether this trend is confirmed. The Chairman of the Kansas City Fed, Jeffrey Schmid, said that the path of monetary policy would depend on the further development of economic data. And Austan Goolsbee from the Chicago Fed confirmed that more data would be needed to justify an easing of interest rates following the disappointing labour market report for July. The Fed recently left its key interest rate unchanged at 5.25-5.5% but hinted at a possible first rate cut on 18 September.

Swiss consumers are somewhat more optimistic

Consumer sentiment in Switzerland improved slightly in July compared to the previous month, as reported by the State Secretariat for Economic Affairs (Seco). The monthly consumer sentiment barometer improved from minus 37 to minus 32 points in July. The components expected economic development, past financial situation, expected financial situation and timing of major purchases were assessed more confidently. In contrast, the consumers surveyed interpreted job security more negatively.

Corporate and macroeconomic calendars

Corporate news in focus: Hannover Re Q2 result.

Economic data in focus: No market-relevant economic data will be published today. 

LGT helps you make informed investment decisions

Global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

Prendre contact