Stock market: September set for a weak finish as US and European inflation figures are released

Upcoming data will guide central banks on interest rates

(Il Sole 24 Ore Radiocor) - The financial markets are approaching the halfway point of the first nine months of the year, with September’s performance so far proving rather weak for equities (with the exception of the Nasdaq) and very negative for government bonds; this week, they will have to contend with their most insidious ‘enemy’: inflation. On Wednesday, the US will release the August estimate for the PCE figure, the key indicator of personal consumption expenditure prices (a stable reading of 3.7 per cent is expected), whilst on Friday Eurostat will measure September’s consumer price inflation in Europe for the first time, with the consensus among analysts expecting a rise in both the headline figure (to 3.5 per cent) and the core figure (to 2.5 per cent). Both figures will be crucial in determining whether the likelihood of further interest rate rises increases or decreases ahead of the Fed and ECB monetary policy meetings scheduled for late October (27–28 for the US, 29 for the European Central Bank).

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