Featured Market Snapshot
Hitting the target with an empty quiver?
Japan tries to jumpstart growth with a new twist; the Fed holds hawkishly; and OPEC stalwart Venezuela imports oil from the U.S., its arch-enemy.
Watch what they say, not what they do...
Fed-watchers will be focused on the week's press conference and the wording of the accompanying announcements, looking for signs of shifting consensus among the voting members of the FOMC. A looming question: are the world's central banks backing away from monetary cures for ailing world growth? Meanwhile, the oil glut deepens as world demand softens and the taps stay open.
Draghi: Steady as she goes
Was Mario Draghi simply being optimistic about Europe's prospects -- or sending a message to Europe's governments about the need for fiscal measures? Meanwhile, U.S. job demand was strong earlier this summer, Swiss insurers are starting to cover physical cash due to negative rates, and tin shorts are getting squeezed.
Slim pickings in the August jobs report
Despite the slight disappointment, markets seemed to say there wasn't enough to go on in the latest figures to tip the odds in favor of a September rate hike. Meanwhile, container shipping may be having its Lehman moment, and the IMF is lobbying for fiscal largesse at the G20 summit.
As planned, less than meets the eye
Fed Chair Janet Yellen delivered a media-friendly quote while staying mostly non-committal on the timing of the next rate hike – no small achievement. Meanwhile, more good news arrived about 2Q in the U.S. and the ECB indirectly suggested that the most helpful boost to Europe's economy would be fiscal rather than monetary.
More mixed signals from the Fed:
Minutes from the July FOMC meeting revealed little consensus for a rate hike in September; new data suggest that Abenomics’ “three arrows” may be falling short; and three reasons that S&P 500 earnings could improve later this year.
How will this affect the Fed?
Retail sales for July disappointed, with auto sales the only major category making up for contraction in the others. Financial markets, however, focused on the impact of the shortfall on the Fed's September rate decision. Meanwhile, Germany issued more zero-coupon notes priced above par, and Brazilian President Rousseff's impeachment grew increasingly likely.
More signs of growth. Rate hike ahead?
July's US employment report was a solid win in just about every category, rekindling speculation about a Fed rate hike as early as September. Meanwhile, the Bank of England cut rates and more than doubled its bond-buying, and Europe's banks pondered the results of one of its regulators' latest stress test.
Look behind the headlines
The disappointing headline GDP for 2Q masked underlying consumer and industrial strength; look for upward revisions in subsequent estimates. Meanwhile, the Bank of Japan held back on further stimulus, perhaps pinning hopes on fiscal expansion. In Europe lending is finally picking up; is growth around the corner?
So far, so good
The US economy is having a solid summer so far; with a dovish Fed, more growth may need new tools. Meanwhile, Europe is feeling the first impact of the Brexit vote; China's currency continues to play a supporting role in global trade.
Wallets at the ready
Slow, steady growth spread to the consumer sector in June, with retail sales perking up right along with consumer prices. Meanwhile, Japan's election gave Shinzo Abe a historically free hand for reform, both economic and military, and China growth showed the benefits of government support.
Friday’s jobs report cheered markets; good news was perceived as good news, given broad-based belief in a still-dovish Fed. Meanwhile, the three-way tug-of-war between Italy's central bank, a preoccupied ECB and a regional Italian bank continued.
While beginning the adjustment to a changing economic and political landscape, world market liquidity appeared to hold up well, thanks to careful central bank management. Meanwhile, Puerto Rico got a much-needed break.
At what price?
Last week's markets and policymakers' reaction to the UK referendum results were about price discovery and risk control; meanwhile, US banks passed an important stress test, and Saudi Arabia seemed to endorse $50 crude.
It's not just for Brexit
The Fed, the Bank of England, the Bank of Japan and the Swiss National Bank all kept their rates unchanged, each for different reasons, but all nodding to the UK's referendum on leaving the EU -- as global bonds and the Japanese yen continued to soar. All this as the European Central Bank (ECB) got ready to add yet more stimulus.
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