Today the economic calendar is quite loaded with events, mostly PMI reports from all over the world, a central bank meeting, and joblessness data from the United States.
First of all, Australia published its manufacturing and services flash PMIs for September. Both reports were slightly higher than the previous readings, though the services PMI remains below 50, which indicates an economic slowdown.
In Europe, today there were reports on GDP growth rates through the second quarter of 2021 published by the Netherlands and Spain. The former did rather well, but the latter missed the forecasts.
Germany also published its flash PMIs for September, where all three reports were below investors’ expectations. Unsurprisingly, the eurozone’s PMI reports fared similarly.
Furthermore, the United Kingdom joined the above-mentioned countries in publishing its September PMIs, where once more there was a disappointment in all three readings.
In addition, the Bank of England held a monetary policy meeting today. On account of the latest worsening in the economic conditions in the United Kingdom, the BoE voted not to change the lending rate. It also kept its quantitative easing program unchanged at 875 billion pounds.
Later today we expect the flash manufacturing PMI for September from the United States. As is typical of any Thursday, the US will also publish its initial and continuing jobless claims reports today.
Meanwhile, investors are still keeping a close eye on the Chinese markets, where the issue of developer Evergrande defaulting continues to unfold. The company has not formally defaulted yet, though it has a massive payment due today, which the government reportedly will help it make, though it is not yet clear how.
Still, for now it seems like the Chinese authorities are looking for ways to save Evergrande, which has helped calm the markets significantly.
In the United States, all major stock indices will trade higher today as a result of yesterday’s monetary policy meeting of the Federal Reserve. The Fed is not getting ready to start tapering asset purchases yet, but a surprisingly high number of board members are now in favor of reducing asset purchases and hiking interest rates in 2023, a year earlier than previously planned.
In the commodity markets, natural gas remains of interest to investors. According to data by Citigroup, demand for gas will remain high in Europe as the colder months begin, and supply remains uncharacteristically low. Prices could potentially increase five times more in the coming months.
