Oct. 1 (Reuters) – Key U.S. employment figures on Friday and an OPEC + meeting on Monday to examine oil production as crude prices exceed $ 80 a barrel topped the market agenda as 2021 draws to the end after a bumpy third quarter.
Here are the five stories that are likely to dominate the thinking of investors and traders over the coming week:
1 / ‘DECENT JOBS’
In September, the Fed said the reduction in monthly bond purchases might be justified “soon”; President Jerome Powell noted that it will take another report on “decent” jobs to get the wheels rolling – not a “super strong”, just one that is “reasonably good”.
Friday’s September non-farm figures – the last official jobs report before the November Fed meeting – will do the trick?
A Reuters poll predicts that 500,000 jobs have been created after the massive failure in August. The Fed’s $ 120 billion-per-month government bond purchase helped the S&P 500 (.SPX) double from the March 2020 lows. But the outlook for crumbling and rising rates has raised US Treasury yields and contributed to the 4% drop in the S&P in September.
Higher-than-expected numbers could fuel fears that the Fed may end its easy money policies sooner than expected, potentially causing more turmoil in the markets.
– “Reasonably good” September jobs start the Fed slowdown. Does another misfire happen?
– Rising Treasury yields beats ARK fund amid large tech sell-off
2 / REDUCED PRICES
The rate decisions are due in Australia and New Zealand – two countries separated geographically only by the Tasman Sea, but on different worlds in monetary policy.
The Reserve Bank of New Zealand looks set to pull the trigger on Wednesday as markets are almost certain of a quarter point increase in the key rate to 0.5% RBNZWATCH. Governor Adrian Orr and his crew were set to become the first in the developed world to hike in August, but a COVID outbreak coinciding with the political meeting threw those plans down, leaving Norges Bank to take the honors.
The Australian Reserve Bank meets on Tuesday and is on the other end of the dove’s spectrum. Despite a hot housing market, Governor Philip Lowe recently threw cold water on the markets, saying he was “struggling to understand why rate hikes are set next year or early 2023” .
-Big central bank exit begins as Norway hikes rates
3 / MONTENT WINTER
Power cuts in China, lines at gasoline pumps in Britain, soaring energy prices everywhere.
Headlines resonate with the 1970s – and nowhere more so than in Britain, where the military will help alleviate a fuel shortage that has led to supermarket shelf vacancies and gas station brawls. The end of a COVID employment support program means more uncertainty.
For some, a 1970s-style ‘winter of discontent’, when the UK economy was brought to its knees by strikes and blackouts, is ahead. But Britain is not alone. Power cuts in China have crippled industrial production, European consumers face higher fuel bills in winter as gas prices soar.
Any signs that pressures on supply chains, labor shortages and energy prices are easing will provide relief, especially for the shabby pound.
The International Monetary Fund’s take on inflation on Wednesday could provide insight into whether endemic price pressures, similar to those of the 1970s, are setting in.
-From chips to ships, shortages make inflation stick
-What is behind the power crisis in China?
4/ PUMP IT UP
When OPEC + ministers – the Organization of the Petroleum Exporting Countries and Russia-Led Allies – meet on Monday to review production policy, they face oil prices at three-year highs above 80 $ a barrel and consumer pressure for more supplies.
Until recently, sources expected the group to stick to the existing plan agreed in July and increase production by 400,000 barrels per day (bpd) per month to phase out 5.8 million bpd of reductions.
But with prices boosted by unforeseen blackouts in the United States and a strong recovery in demand after the pandemic, that thinking could change: OPEC + sources said adding more oil was seen as a scenario. .
The White House, which has raised concerns about the high prices, said it was in communication with OPEC and was looking to meet the cost of oil.
-OPEC + is considering options to release more oil on the market -sources
It’s been quite a journey over the past three months: Chinese markets have suffered some of their biggest drops, energy prices have skyrocketed, shipping and raw material costs have skyrocketed and the clearest signs to date have emerged that central banks are starting to turn off the money taps.
The rollback led to the first quarter of losses for global equities (.MIWD00000PUS) since COVID-19 began to wreak havoc early last year, bonds experienced a volatile September amid talks about tapering, and the safe haven dollar is looking for its strongest year since 2015.
Analysts predict a bumpy ride ahead, with markets predicting the end of the “Goldilocks” scenario – when growth and inflation are neither too high nor too low. Now is the time for investors to take bear awareness.
-GRAPHIC-Markets in Q3: Bear in the store in China
Reporting by Kevin Buckland in Tokyo, Ahmad Ghaddar, Dhara Ranasinghe, Marc Jones and Julien Ponthus in London, Ira Iosebashvili in New York, compiled by Karin Strohecker, editing by Jane Merriman
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