A Look at the Day Ahead in European and Global Markets

Overview

Stella Qiu discusses key market indicators and expectations for rate cuts across Europe, New Zealand, and the U.S.

European Services PMIs

Services PMIs due on Thursday across Europe are expected to show further moderation, solidifying rate cut expectations in the region. Investors anticipate the European Central Bank (ECB) to cut rates by 25 basis points at its next two meetings in October and December, following hawk Isabel Schnabel’s more optimistic view on inflation.

UK and German PMIs

Though services are expanding in Britain, composite PMIs in Germany and other parts of Europe are likely to indicate contraction for September.

U.S. Economic Data

On Thursday, jobless claims and the ISM services survey will be key data points, with Friday’s payroll figures being the highlight.

New Zealand Rate Expectations

Economists expect the Reserve Bank of New Zealand to cut rates by 50 basis points at its October and November meetings.

Singapore Manufacturing PMI

Singapore’s manufacturing PMI remained in expansion in September, with new orders rising. However, analysts warn of potential weaknesses due to increasing input prices and declining electronic order backlogs.

Asian Market Performance

Asian markets experienced a mixed day. The MSCI ex-Japan index fell by 1.4%, while Hong Kong’s Hang Seng dropped by 3.5%. Hong Kong tech shares declined over 5%, and property stocks faced significant losses.

Japan’s Nikkei

Japan’s Nikkei saw a 2.3% increase as newly elected Prime Minister Shigeru Ishiba’s dovish statements led to expectations of persistent loose monetary policy from the Bank of Japan. However, the yen fell to its lowest level in a month, dropping 2% overnight.

Market Expectations

Markets suggest almost no chance of a Bank of Japan tightening in October, with minimal expectations for future rate increases.

Key Developments for Thursday

• HCOB Eurozone Services PMI
• U.K. S&P Global Services PMI
• U.S. jobless claims, ISM services PMI
• Appearances by Fed Atlanta President Raphael Bostic and Fed Minneapolis President Neel Kashkari

(By Stella Qiu; Editing by Edmund Klamann)