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WEEK AHEAD: SEPTEMBER 5

Short Description

ECB Meeting & UK Leadership Race Ends

Video Script

Number one:

ECB Interest rate decision

On Thursday this week, another widely anticipated meeting of ECB policymakers is scheduled. Markets have increased their bets on a likely 75 basis point hike from the ECB, up from 48% last week to roughly 67% since the Jackson Hole symposium as of August 30th. Before this week's meeting, euro volatility could increase due to increased chances of a rate hike.

Number two:

BOC Interest rate decision

This week will witness another interest rate decision from the Bank of Canada on Wednesday. On August 30th, Markets implied there is a 46% likelihood of raising borrowing costs by 0.75 percentage points. Bets for this increase were higher earlier last month but dropped when U.S. consumer price data revealed that annual inflation had slowed to 8.5%, a result seen as broadly taking pressure off central bankers to do more to combat inflation.

Number three:

RBA Interest rate decision

Policymakers from the Reserve Bank of Australia will debate whether to raise interest rates for the fourth consecutive time by 50 basis points on Tuesday. The Australian economy's price pressures have not yet shown signs of easing, despite falling commodities. The Australian Consumer Price Index is at 6.1%, as of the second quarter, and more rate increases are very likely to come.

Number four:

UK leadership race ends

Monday marks the end of the contest to become the next leader of the Conservative Party and take over as British Prime Minister in Downing Street. The race began after Boris Johnson declared in early July that he would be stepping down. In surveys of Conservative Party members, Foreign Secretary Liz Truss has repeatedly outperformed former Finance Minister Rishi Sunak by large majorities and she is the favorite to win the race.

Number five:

Labor Day holiday

This week, the US and Canada will have a long weekend for the Labor Day Weekend. Monday, the first Monday in September, will be a federal holiday in the United States and Canada. As a result, the US and Canadian cash stock market sessions will be closed on Monday. Stock markets are scheduled to reopen on Tuesday, while forex markets wil be open throughout.