Busy September for markets ahead | Calamatta Cuschieri

Market participants may have remained a little bit disappointed by the lack of fresh information coming out of the Jackson Hole meeting last Friday as the Federal Reserve chief Jerome Powell sounded perhaps a little more dovish than originally expected.  However, investors who should be back from their mid-year retreat, will have a lot to focus on over the next couple of weeks, as we move into an incredibly busy month in September.

Data will be a key focus over the next couple of days, particularly with the US jobs report on Friday that will help set the tone for the Fed’s next meeting in September.   Meanwhile, the flash CPI reading for the Euro Area will also be out ahead of the ECB’s own meeting the week after.

September should also be the month when President Biden will probably decide on the next Fed chair with Bloomberg having previously reported that this could happen around Labour Day on September 6.  Powell’s four-year term as Fed chair will end in early 2022 and till now he seems to enjoy the support of Treasury Secretary and former Chair of the Federal Reserve Janet Yellen  who presumably holds a certain degree of influence over the decision Biden will make.

Separately, there are set to be a number of spending battles in the US Congress too next month, with the government funding running out on September 30 resulting in a potential debt-ceiling fight.  Meanwhile, Speaker Pelosi has committed that the House will vote on the bipartisan infrastructure bill by September 27 and there is also the debate on the $3.5 trillion reconciliation bill at the same time.

Meanwhile, in Europe, we’ve got the German federal election on September 26, with potentially big ramifications for EU affairs as well.  The latest polls are all pointing to an incredibly tight race at the top, with the CDU/CSU and SPD both very close, while the Greens are lagging slightly behind.  The election will come soon after another general election in Canada the previous week where recently the Liberals lead seems to have faded as Trudeau’s popularity has started to dip.

Finally, of course, there will be an intense focus on Covid-19 and the delta variant, particularly with schools heading back and the northern hemisphere winter ahead.  This means more indoor mixing taking place where respiratory viruses spread more easily.  As such, we should see more countries moving towards rolling out booster shots to control any renewed surge in cases.

Disclaimer: This article was written by Stephen Borg, Head of Private Clients at Calamatta Cuschieri. The article is issued by Calamatta Cuschieri Investment Services Ltd and is licensed to conduct investment services business under the Investments Services Act by the MFSA and is also registered as a Tied Insurance Intermediary under the Insurance Distribution Act 2018.

For more information visit https://cc.com.mt/. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.