Moreover, the labour market remains tight by many measures and the climb in crude oil is a concern.
About one in five of the economists in the Reuters poll say another hike is coming by year-end, which gels with what Fed chief Jerome Powell said in Jackson Hole about the potential need for more tightening.
It’s a crucial week and a half for the world’s biggest central banks, with the Fed decision on Wednesday next week followed by the Bank of England on Thursday and the Bank of Japan on Friday.
|
For Andrew Bailey and his cohorts, today will be a busy one for analysing data that includes GDP and factory production.
But starting things off, of course, is the ECB tomorrow. And markets have had a big change of heart on the outcome over the past 24 hours, with what had been judged a coin toss for a quarter-point rate hike jumping to 75% odds after a Reuters report that the central bank expects inflation will stay above 3% next year in its updated forecasts, far exceeding the 2% target.
For currency markets in Asian time, the dollar was on the front foot, clawing back some of the overnight weakness against the euro and climbing back toward a 10-month top versus the yen.
Sagging stocks though don’t bode well for the European open, as Asian investors continued the sell-off seen on Wall Street. China set the pace, with mainland blue chips down about 1%.
|
/cloudfront-us-east-2.images.arcpublishing.com/reuters/NNPEYAWLFJMHROQ6ZA7RCVDUOI.jpg "Will CPI fit the Fed-on-hold narrative? 40")
