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U.S.–China: Trade and technology take centre stage
The meeting between the U.S. President Donald Trump and Chinese President Xi Jinping on Thursday will be one of the week’s biggest market events. Investors will be watching for developments around tariffs, technology restrictions, critical-mineral supply chains and agricultural trade, with the existing U.S.–China trade truce also in focus.
Market implications:
- A constructive tone could ease concerns around trade disruptions and support equities and other risk-sensitive assets.
- Renewed tensions around tariffs, technology or critical-mineral exports could increase volatility across equities, currencies and commodities.
- Any developments affecting supply chains could also have implications for inflation expectations and longer-term Treasury yields.
Fed: Policy signals remain important
Following the September Fed decision, markets will continue to assess policymakers’ comments for clues on the outlook for interest rates. Several Fed officials are scheduled to speak this week, while Wednesday’s PMI data will provide another read on economic momentum.
Market implications:
- A hawkish tone could support Treasury yields and the U.S. dollar while adding pressure to rate-sensitive equities.
- Greater confidence around inflation and future easing could ease pressure on yields and support risk assets.
- The interaction between incoming economic data and Fed commentary will remain important for rate expectations.
PMIs: Growth and price pressures in focus
The preliminary September manufacturing and services PMIs on Wednesday will provide an early indication of business activity across the U.S. and other major economies. Markets will be watching the data for signs of changes in growth, employment and input-price pressures.
Market implications:
- Stronger activity could support growth expectations and equities while keeping pressure on yields if price pressures remain elevated.
- Weaker readings could reinforce concerns around economic momentum and support expectations for a more accommodative policy path.
Oil and geopolitics remain key market drivers
UN General Assembly week continues in New York, with developments around the Middle East and U.S.–Iran diplomacy likely to remain relevant for energy markets. Oil prices have remained above $100 a barrel amid uncertainty around regional supply risks, keeping energy prices an important input for inflation expectations.
Market implications:
- Higher oil prices could add to inflation concerns and place upward pressure on yields.
- A reduction in geopolitical tensions could ease energy-price pressures and support broader risk sentiment.
- Gold and Treasuries will remain sensitive to shifts in geopolitical risk and investor demand for defensive assets.
Other data to watch
Beyond the major geopolitical and policy developments, U.S. initial jobless claims and new-home sales on Thursday will provide further signals on the labour market and housing activity. Friday’s durable-goods orders and final University of Michigan consumer-sentiment data will offer additional insight into business investment, household confidence and inflation expectations.