Global equity markets are sharply lower ahead of potential fireworks this week, with economic data, G20 statements and central bank meetings all threatening to move markets.
Far from withdrawing the punch bowl, global central banks’ quantitative easing and low interest rate policies continue to provide stimulus for the equity market rally, so it is crucially important for investors to know how long the music is going to keep playing or if the party is coming to an end.
With the odds of a US rate rise on Wednesday close to 100%, the main event is the statement and press conference, with Jerome Powell firmly in the hot seat.
All eyes are on whether the Fed will confirm recent hints made by officials that four rate rises are more likely than three this year and provide clarity for investors on their view of the US economy.
In the UK, interest rates are a near certainty to remain unchanged on Thursday, but a May rise is a real possibility, so the number of hawks and the tone of the language are likely to be pivotal here.
The G20 conference of finance ministers is likely to be dominated by tariffs and trade wars. The introduction of steel and aluminium tariffs is already causing consternation and those countries most affected by the tariffs are caught between wanting to openly criticise the action and at the same time trying to achieve an exemption.
However, potentially more worrying is the scope for a deterioration in relations between the USA and China as Trump threatens to take another swipe at Chinese exporters. The usual political play book has been ripped up by President Trump, so it will be interesting to see how members of the G20 try and achieve the required collaborative aims amid the conflicting vested interests.
Source: interactive investor Past performance is not a guide to future performance
High street gambling companies are breathing a sigh of relief after the Gambling Commission has been far less severe in their recommendations than the market previously feared.
Ladbrokes Coral (LCL) and William Hill (WMH) operate over 75% of all high street gambling shops and each earns over 50% of their net revenues from their retail presence, deriving significant income from fixed odds betting terminals – so these recommendations, if implemented, would be tantamount to them winning the lottery.
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