Fed speeches in focus after central banks decisions

This week saw several central banks announce their rate decisions, with most of them leaving them unchanged and only offering indications of when there could be a potential change in monetary policy. While focus remains on the FED decision and economic projections released this week, today’s speeches by members of the US central bank could have an unexpected impact on markets in the near future. The speakers include FED chairman Powell and vice chair Clarida, who could provide further information on the timing of a potential tapering, which as we have seen previously has had an impact on US indices, the US Dollar along with Gold and other commodities. After news emerged that the Chinese giant Evergrande failed to make coupon payments yesterday, it will be interesting to see if the US central bankers will downplay the situation or if it will be a topic for the FED to discuss in order to avoid concerns of a chain reaction spilling into other global markets.

German IFO disappoints ahead of federal elections

Today’s German IFO data came in below expectations with a reading of 98.8 compared to the expected 99.0 and below the previous reading of 99.6. While this could be considered another sign of a slowdown in economic recovery, it is important to note that this reading comes just before Sunday’s elections which will be the first after Merkel’s era. European markets reacted slightly to today’s IFO report but it will be worth keeping an eye on Germany’s election this weekend as we could see it have a far reaching impact on the Eurozone economy and markets across the continent.