Investors will be watching closely this week to monetary policy decisions that will be reached from the U.S. Federal Reserve and Bank of Japan due out on Wednesday.
Following the Fed’s 2 day policy meeting on Wednesday, Fed Chair Janet Yellen will be conducting a press conference.
Most economists and investors are not expecting the U.S. Federal Reserve to raise interest rates at their September meeting this week.
Last week, retail sales for August came in weaker than expected and the Producer Price Index (PPI) for the same period of time was flat.
The August non-farm payroll report showed that 151,000 non-farm payroll jobs were created in August, missing consensus estimates, even though over the past 3 months, job gains have averaged a robust 232,000 per month.
According to the CME Group’s Fed Watcher, there is just a 12 percent probability that the Federal Reserve will raise interest rates 0.25 basis points to between 0.50-0.75 percent at their September meeting this week.
The chances grow stronger for a rate hike in December.
There is a 45.2 percent that the Federal Reserve will raise interest rates 0.25 basis points to between 0.50-0.75 points at their December meeting based on the CME Group’s Fed Watcher.
Last Monday Fed Governor Lael Brainard said that the case to tighten interest rates is “less compelling” and called for “prudence” during her speech before the Chicago Council on Global Affairs.
U.S. stocks rallied on the news.
The Week Ahead
The U.S. economic calendar is light this week.
Besides the interest rate decision from the Fed on Wednesday, housing starts and building permits for August will be reported on Tuesday.
Existing home sales for August will be released later on Thursday.
Full Economic Calendar
Monday- NAHB Housing Market Index (Sept.)
Tuesday- Housing Starts (August), Building Permits (August)
Wednesday-FOMC rate decision, Crude Inventories, MBA Mortgage Index.
Thursday- Existing Home Sales (August), Initial and Continuing Jobless Claims, FHFA Housing Price Index (July).