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Weekly Outlook: Sept 9 - 13

Investing.com - Investors will be watching this week’s European Central Bank meeting, as well as developments around Brexit and the intensifying U.S. - China trade war amid heightened concerns over the growth outlook for the global economy.

The U.S. dollar was holding above one-week lows against a currency basket on Friday after a mixed U.S. jobs report for August reinforced the view of a slowing expansion and chances of more interest rate cuts from the Federal Reserve.

Fed Chair Jerome Powell did little to alter those expectations. At an overseas event on Friday, he cited risks in particular U.S.-China trade tensions that may derail the current U.S. economic expansion, which is the longest one on record.

Interest rate futures still implied traders positioned for a quarter-point rate decrease at the Fed’s Sept. 17-18 policy meeting according to Investing.com’s Fed Rate Monitor Tool.

“We are going to act as appropriate to sustain the expansion,” said Powell on a panel in Zurich.

In late U.S. trading, the U.S. dollar index that tracks the greenback against the euro, yen, sterling and three other currencies was steady at 98.37 after hitting a one-week low of 98.08 on Thursday. The dollar index ended the week down 0.6%, its steepest weekly loss in a month.

The greenback lost ground against its rivals as global tensions receded, most notably with China and the United States agreeing to high-level trade talks in October.

The British pound was down 0.4% at 1.2277, but still well above the sub-1.20 three-year lows hit on Monday after lawmakers voted to block a no-deal Brexit, making a snap election more likely. For the week, sterling gained 1%.

“The main threat to sterling’s recovery is if Johnson’s Conservative party were to win with a majority in an early election. They could then overturn the legislation requiring them to ask for an extension, increasing the threat of leaving without a deal,” said Mark Haefele, Chief Investment Officer, UBS Global Wealth Management.

Haefele predicted that the pound would weaken to 1.15 or lower in the event of a no-deal Brexit.

The euro was steady at 1.1029 per dollar in late trade, to end the week up 0.35%.

Ahead of the coming week, Investing.com has compiled a list of significant events likely to affect the markets.

Monday, Sept 9

U.K. GDP (QoQ)

China CPI, PPI (Aug)

Tuesday, Sept 10

U.K. Employment report (Jul)

U.S. Jolts job openings (Jul)

Wednesday, Sept 11

U.S. PPI (Aug)

Thursday, Sept 12

U.S. CPI (Aug)

EuroZone ECB rate decision&press conference

Friday, Sept 13

U.S. Retail sales (Aug)

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