Focus shifts to budget agreement as deadline nears
WEEKLY MARKET COMMENTARY |
The upcoming week will likely see a shift in investor focus away from data and to Washington D.C. where the deadline for a budget agreement is rapidly nearing. If Congress and President Barack Obama don’t find common ground, investors could see another government shutdown. If that’s the case, investors should be prepared for a shock to business and consumer confidence, which wouldn’t bode well given uncertainty over the path of domestic monetary policy and the condition of the international economy.
That aside, investors will still see a heavy week of first-tier economic data, including fresh information on the labor market, income and spending, manufacturing, housing, auto sales and construction. Data in Europe will feature new estimates of euro area inflation and unemployment. Investors following the situation in China will see the September manufacturing Purchasing Managers’ Index (PMI) and Caixin China manufacturing and PMI services composite published on Wednesday.
Meanwhile, the Federal Reserve will send six speakers to discuss monetary policy this week, including Chair Janet Yellen and Vice Chair Stanley Fischer. Fischer will deliver the keynote address at the Boston Fed’s symposium on monetary policy. The European Central Bank’s’ Mario Draghi will also speak in Washington on Thursday.