5 world market themes for the week ahead
U.S. inflation numbers, the latest Japanese economic data and a slew of UK data could give investors a fresh steer.
1. SUMMER CHILL, NO WAY
Investors should have learned by now that there's no such thing as a «quiet» summer in markets.
A year ago, Treasury yields rose sharply on worries about the U.S. fiscal outlook. The summer before, inflation and rate hike fears jolted markets.
Monday's meltdown saw Japan's second-biggest stock crash and the largest ever intraday jump in Wall Street's most-watched gauge of investor anxiety, the VIX. That means the coming days will be tinged with nervousness, even if there are nascent signs of recovery.
Focus is on just how much more of an unwinding of so-called yen carry trades, seen as one reason behind the rout, is left and whether the pricing-in of aggressive U.S. rate cuts are justified by upcoming data.
And with concerns about a broader Middle East conflict and a U.S. election looming, volatility is unlikely to disappear soon.
2. READY FOR MORE?
Investors are now bracing for Wednesday's U.S. consumer price data for a read on how inflation is faring in the world's largest economy amid recent signs that growth is wobbling.
Market hopes of an economic soft landing have been shaken by recent weak data, including news of a rapid down-shift in the jobs market. The slowdown fears have coalesced with the unwinding of a global carry trade to deliver markets a wallop.
Some analysts believe recession worries are premature.
Economists polled by Reuters expect both
