Tom Westbrook provides an update on the European and global markets for the day ahead.
No more watching football and cricket for a week while counting down to the release of the US Consumer Price Index on Friday.
It’s been a turbulent wait following surprising inflation surprises in Canada and Australia, a collapse in the yen and a negative reaction to Micron’s strong results.
Shares of the chipmaker, seen as an industry bellwether due to its exposure to various types of chips and customers, fell 8% in after-hours trading, dragging Nasdaq futures with it.
Australia’s bond market has taken a hit, with three-year government bond futures down 26 ticks in two sessions as the risk of another rate rise increases. Shares of Australian banks fell in anticipation of economic woes and bonds, from utilities to real estate, were punished after the dividend sell-off.
The pace of expected rate cuts in Canada has been reduced.
The yen, meanwhile, fell to its lowest level since 1986 at 160.88 per dollar on Wednesday, hovering around those levels in the Asian session as Japan’s finance minister reiterated his concerns.
The yen has lost about 12% against the dollar this year, the biggest decline of any G10 currency, mainly due to the wide gap in US interest rates – above 5% in the short term – and Japanese rates, which are close to zero.
Eurozone confidence, services and economic sentiment surveys are due on Thursday, as are final US GDP data, although both are likely to be overshadowed by the PCE reading, the measure of l The Federal Reserve’s preferred inflation rate, which is expected on Friday.
CNN is also broadcasting the first US presidential debate, during which debt and the dollar are likely to be the focus of discussion, although markets have so far struggled to grasp the implications of November’s election outcome.
Joe Biden and Donald Trump’s microphones will be muted when it is not their turn to speak.
Voters view Republican candidate Trump as better for the economy, but prefer his Democratic rival President Biden’s approach to preserving democracy, according to a new Reuters/Ipsos poll. However, according to a Washington Post poll, more voters trust Mr. Trump to preserve democracy in swing states.
How do you assess this?
Main developments likely to influence the markets on Thursday:
Confidence surveys in the Eurozone
US GDP
US presidential debate
