World markets during the coming days in the week ahead will be paying close attention to potential developments in two geopolitical fronts, namely the Sino-US trade war and tensions in the Persian Gulf between Iran and the West.
Trump’s tariffs to cast a shadow
In the first front, investors will be keen to watch what Beijing’s next step will be in its avowal to counter US President Donald Trump’s announcement of fresh 10 percent tariffs on $300 billion-worth Chinese goods.
In the meantime, China’s export, import and trade balance figures will be followed later the week -with expectations showing negative numbers due to the protracted trade spat that has harmed Chinese businesses and production.
When it comes to the second front, as the week starts, Iran announced that it has seized yet another oil vessel in the Gulf. The isolated and sanctioned country’s state media identified the tanker’s nationality as Iraqi and accused it of “smuggling” Iranian oil. Tehran continues to keep a British vessel in detention as the US and UK team up allies for forming a military alliance to patrol waters in the region. Washington is likely to ratchet up the rhetoric against the Islamic Republic.
Aussie, Kiwi Central banks
The Reserve Bank of Australia is meeting on Tuesday to discuss its monetary policy amid a global wave of easing. The RBA which was the first to start cutting interest rates in 2019, is largely expected to take a breath this time around and leave the rates unchanged, even after the half-hearted cut by the US Federal Reserve.
Next door in New Zealand, economists anticipate that the central bank is keen on going for a 25 basis point cut in the midst of slowing domestic growth worsening outlook in the world, particularly in China — a leading NZ trade partner.
When it comes to Fed, investors are to tune into speeches by the St Louis Fed President James Bullard on Tuesday and Chicago Fed President Charles Evans on Wednesday in the aftermath of last week’s fateful cut that roiled the markets worldwide due to confusing messaging.
Japan and UK growth
Britain’s domestic growth figure in the second quarter is coming out on Friday as the London government grapples with the promise of delivering Brexit at whatever cost necessary, thus triggering alarms at the Bank of England and EU’s executive capital Brussels. The UK GDP will not surprise when it comes lower than previous performance in the year-on-year comparison.
But a day before that, Japan’s GDP release will be followed. The Asian economic powerhouse’s growth is also expected to have contracted as the trade spat between its two largest trade partners continues to take a heavy toll in multiple economies.
Monday
Canada — Civic holiday, China Caixin Services PMI, UK composite PMI, services PMI, US ISM Non-manufacturing PMI, New Zealand employment change
Tuesday
Australia RBA interest rate decision, RBA rate statement, US JOLTs job openings
Wednesday
New Zealand RBNZ interest rate decision, RBNZ rate statement, press conference, Canada Ivey PMI, Germany industrial production, US crude oil inventories
Thursday
Japan GDP, China exports, imports, trade balance
Friday
UK GDP, manufacturing production, Canada employment change, China CPI, PPI
