After the fireworks of last week and
most of the previous one, the first two days of this week have been characterised
by choppy, sideways trading, with low volatility. Monday, of course, was also
the last day of August while yesterday marked the first trading day of the new
month of September. These days are always occasions when it is likely that
institutions will be adjusting positions for reporting and other reasons.
But there are two other events that
this week that might have convinced market participants to sit quietly and
await the outcomes. The first of these occurs tomorrow, when the European
Central Bank (ECB) under Mario Draghi will release its first monetary policy
statement of the post-summer season. There will, as usual, be a press
conference afterwards. Then, on Friday, we have the US Non-Farm Payrolls
report, which is always closely watched and reacted to.
Three
reports today will set the tone
There are three reports due for
release today that will give some forward guidance to the market in regard to
the matters that are of concern to all. These are the Eurozone Producer Price
Index (PPI) which, while not normally as impactful as the Consumer Price Index
(CPI), will nevertheless have something to say about the all-important question
of inflation, or the lack of it, in the region where the Single Currency is
used. Later, the US private payroll company, ADP, will release its estimate of
the jobs situation in the preceding month, which always attempts to anticipate
the official US Non-Farm Payrolls two days later. Lastly, US Factory orders at
15:00 GMT+1, will indicate the totality of orders for both durable and
non-durable goods in the United States.
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