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Weekly Market Preview
Monday, 19 August 2024
The year-over-year U.S. Consumer Price Index (inflation rate) has dropped to its lowest level in more than three years, falling below the 3% mark. This decline opens the door for a potential interest rate cut by the Federal Reserve in its September meeting. The main question now is whether the Fed will choose a 25-basis point cut or opt for a larger 50-basis point reduction, given the recent weakening of the U.S. labor market. The latest jobs report showed the unemployment rate rising to 4.3%, an increase of half a percentage point over the past year and signalled the possibility of an economic recession.
Market participants will look for further guidance on the Fed’s monetary policy in the Fed Chair’s speech at the Jackson Hole symposium for central banks later this week. Additionally, the upcoming August jobs report will be closely monitored to assess whether the labour market’s recent softness continues, potentially requiring additional economic stimulus.
This week, investors will closely analyse the minutes from the Federal Reserve’s previous meeting, which will provide valuable insights into members’ perspectives on the U.S. economy and the future course of monetary policy. Particular focus will be on the number of members advocating for an accelerated initiation of interest rate cuts. Additionally, preliminary data for the U.S. Purchasing Managers’ Index (PMI) for the manufacturing and services sectors in August will be released. These figures will help assess the overall health of the U.S. economy. A manufacturing PMI reading above 50 would signal a shift from contraction to expansion, reducing concerns about an imminent recession. The same positive outlook would apply if the services sector PMI remained above 50.
Monday, 19th of August
Tuesday, 20th of August
Wednesday, 21st of August
Thursday, 22nd of August
Friday, 23rd of August
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