Wednesday preview: US-China trade talks, Fed meeting in focus
Traders will have their plates full on Wednesday as the 13th round of US-China trade consultations get underway in Washington DC and rate-setters at the Federal Reserve announce their latest policy decision.
Ahead of those consultations, China's Xinhua said that the country's vice finance minister and deputy director of the Office of the Central Commission for Financial and Economic Affairs, Liao Min, would lead the delegation that was due to head to the US on Wednesday.
According to the Global Times, Liao's inclusion could bring "fresh air" to the talks.
Separately, in a post to his account on social media platform Twitter, GT editor, Hu Xijin, said he hoped that the US could treat the bilateral talks with a "realistic attitude".
Recent optimism around the trade talks have already seen government bond yields return to nearly where they stood before the US President announced another round of trade tariffs at the start of August.
So much so that Fed funds futures were no longer factoring-in another cut to official interest rates by the Federal Open Market Committee on Wednesday, putting the odds at about 50.0%.
Despite that, economists at Barclays Research were still anticipating a 25 basis point reduction in the target range for the Fed funds rate to between 1.75-2.0% and that central bank chief, Jerome Powell, would stick to his commitment to "act as appropriate" in order to sustain the expansion.
If Barclays's rate call proves prescient, that would entail a degree of scope for a positive surprise for markets that wasn't there just a few weeks before - or exactly the opposite.
Also due out are UK consumer price data for August, with the year-on-year rate for both headline and core inflation seen dipping by one tenth of a percentage point in August, to 2.0% and 1.8%, respectively.
White goods retailer Kingfisher is the most important of the corporates scheduled to update markets on Wednesday.
According to CMC Markets UK's David Madden, investors will be especially keen to hear whether the company's recently-arrived boss, Thierry Garnier, intends to continue with his predecessor's cost-cutting drive.
And given the less than spectacular outlook for the sector due to Brexit, specifically, and the broader worldwide growth malaise on the back of trade tensions, it was an open question whether Kingfisher would stick to its full-year targets.
"The UK housing market is slowing down, and in some regions of the country, prices are falling. The UK construction PMI reading shows the sector is incurring negative growth," said Madden.
"Seeing as the group in involved in home improvements, and it acts a wholesaler to the construction industry, the outlook for the industry isn’t great."
Wednesday September 18
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INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Building Permits (US) (13:30)
Consumer Price Index (EU) (10:00)
Crude Oil Inventories (US) (15:30)
Housing Starts (US) (13:30)
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UK ECONOMIC ANNOUNCEMENTS
Consumer Price Index (09:30)
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Retail Price Index (09:30)
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