The week ahead | Calamatta Cuschieri

Germany’s elections

Germany takes the polls on the 24th of September to vote for one of the biggest jobs in Europe. For the first time since World War Two, six parties are expected to enter the Bundestag, including a group of right-wing nationalists. If the polls are right, Angela Merkel is heading for four more years at the top in Germany. This is the first national vote since the Merkel government opened Germany's doors to an influx of migrants and refugees in 2015, letting in almost 900,000 people.

Big decisions from the Federal Reserve

The US Federal Reserve is scheduled to host its biggest meeting of the year on 19th – 20th September where the Federal Open Market Committee will issue and updated summary of economic projections followed by a press conference by Chair, Janet Yellen. The Federal Open Market Committee's two-day meeting will begin with an interest rate decision expected early Thursday local time. Markets do not anticipate an interest rate hike at the central bank's September meeting, but will be looking for more details on plans to unwind its balance sheet.

Market reactions

Investors breathed a sigh of relief that the weekend passed with no new provocation by North Korea, leading world stocks to a record high on Monday and the dollar reaching an eight-week peak against the yen on expectations that the U.S. Federal Reserve will this week announce trimming of its balance sheet.

Europe’s main share index opened at a six-week high. MSCI’s broadest index of Asia-Pacific shares outside Japan had earlier risen to heights not visited since late 2007. Yields on the benchmark 10-year U.S. Treasury note stood at 2.21 percent after climbing steadily in the past week. Meanwhile, investor desire for less risky assets faded relatively quickly following North Korea's missile launch on Friday, but developments on the Korean Peninsula are likely to continue attracting attention.

Disclaimer: This article was issued by Peter Petrov, Junior Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is 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. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.