Investors ponder US economic data and PBOC rate cut
WEEKLY MARKET COMMENTARY |
Global investors will have plenty to consider this week including a bevy of U.S. economic data and the impact of another rate cut this year by the People’s Bank of China (PBOC). Over the weekend the PBOC reduced its lending rate to 4.35 percent, its deposit rate to 1.5 percent, and its reserve requirement ratio for large banks to 17.5 percent. In our view, the slowdown in China’s real economy will require more aggressive action by the PBOC and will likely result in vigorous fiscal stimulus in coming months.
Economics data in the U.S. this week includes a series of first-tier housing data, the September trade report, the latest Federal Reserve Open Market Committee (FOMC) rate decision, an advance look at third quarter gross domestic product (GDP) and September personal income and spending data.
After the FOMC rate decision the Fed will send out three speakers this week, most prominently San Francisco Fed President John Williams who will address the natural rate of interest and the underlying trend growth rate of the U.S. economy.