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US dollar bills can be seen in front of the stock chart displayed in this illustration taken on February 8, 2021. REUTERS / Dado Ruvic / Illustration

LONDON, Aug. 12 (Reuters) – Below are five events and themes that are likely to dominate global financial markets over the next week.

1 / READY, STABLE, GO

New Zealand’s central bank is meeting on Wednesday and is expected to become the first major economy to raise interest rates since the COVID-19 hit.

Very strong employment data raised expectations of a hike, which would be New Zealand’s first since mid-2014. What a contrast to 2020, when rates were cut 75 basis points to 0.25% and a move below zero became a real possibility.

The central bank of Norway, meeting Thursday in the meantime, could reiterate that it will increase its rates in September.

Investors, focused on the outlook for the Fed to cut back as working conditions improve, boosted the dollar. New Zealand and Norway recall that the greenback is not the only currency to benefit from the change in monetary policy underway in the G10.

– New Zealand inflation expectations jump in Q3 -RBNZ

Image Reuters

2/ MALLRATS

The US economy is growing strongly and the labor market is rebounding. However, COVID-19 remains a headwind and the coming days should bring a new perspective on the situation for consumers.

Retail sales in the United States likely fell 0.2% in July, following an unexpected rise in June, Tuesday’s data is expected to show.

And several large retailers, including Walmart (WMT.N), Target (TGT.N), Lowe’s (LOW.N) and Home Depot (HD.N) will release quarterly results. The earnings are also owed by Ross Stores (ROST.O), TJX Companies (TJX.N) and Bath & Body Works (BBWI.N).

These come at the end of an excellent second quarter earnings season in the United States. S&P 500 (.SPX) earnings are expected to have jumped 93.1%, well above previous expectations of 65.4%, according to Refinitiv IBES.

Fed policymakers, weighing when to start releasing stimulus, will be watching.

-Fed officials grapple with timing to cut asset purchases read more

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3 / BLUE DELTA

The Delta variant is set to break through Asian COVID-zero strongholds, with outbreaks and lockdowns threatening what once seemed the most promising regional rebound in the world.

With the exception of Taiwan and New Zealand, where strict border controls appear to have kept the variant at bay, cities from Sydney to Seoul are struggling to contain infections.

In China, Delta has been detected in more than a dozen cities, weighing on a faltering economy, forcing economists to downgrade growth forecasts.

We’ll get a glimpse of how the economy develops in July as local activity and thefts slow down – retail sales, industrial production and house price figures are all due on Monday.

– The COVID epidemic in China hits the service, travel and hospitality sector read more

– Wall Street Investment Banks Cut China’s Growth Forecast Read More

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4 / APOCALYPSE NOW

If this summer has shown us anything, it’s a glimpse of the kind of devastation the planet faces if the climate emergency is not resolved quickly.

Apocalyptic forest fires, floods and droughts ravage swathes of Greece, Canada, Turkey, China, Argentina and the United States. Extreme weather consequences include deaths, homelessness, social unrest and rising public debt.

The climate emergency will increase costs everywhere: insurance covers only 60% of disaster-related losses, even in wealthy North America; it falls to 10% in China, says Swiss Re. Worse yet, fires exacerbate emissions, while forests supposed to serve as carbon sinks will take decades to grow back.

The warnings so far, including a recent one from the United Nations, have had limited impact. But with a global climate conference slated for November, this summer’s climate disasters may well tip the pendulum.

– The UN launches a clarion cry on “irreversible” climate impacts

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5 / AFGHAN ABYSS

The Taliban’s rapid advance into Kabul has sounded the alarm not only over the future of Afghanistan, but also the wider fallout in what is already a dangerous neighborhood.

Iran to the west, the Central Asian republics of Tajikistan, Turkmenistan and Uzbekistan to the north may be at risk, but for markets, Pakistan to the east will be the immediate target.

Pakistan has a lot of debt and a large stock market. It also depends on a $ 6 billion IMF program. The prospect of years of Taliban violence and massive waves of Afghan refugees will add to the struggle to repair its finances.

– The Taliban take the strategic Afghan town of Ghazni on the road to Kabul read more

– IMF says talks with Pakistan are underway; more work needed on structural reforms

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Reporting by Tom Westbrook in SINGAPORE, Lewis Krauskopf in NEW YORK, Sujata Rao, Marc Jones and Dhara Ranasinghe in LONDON; Compiled by Dhara Ranasinghe; Editing by Susan Fenton

Our Standards: Thomson Reuters Trust Principles.

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