It's Fed decision week, Chinese stocks fall on soft data and euro-area industrial production increases by the most since February. Here are some of the things that people in markets are talking about this morning.
The story that will be leading markets throughout this week will be Thursday's Federal Reserve interest rate decision. While market expectations of an increase in rates have fallen to 28 percent, down from over 50 percent a few weeks ago, economists insist the decision is still too close to call. The dollar is lower this morning as investors weigh the prospects of a move on Thursday. A 2014 speech from Fed Vice Chair Stanley Fischer explains why the Fed might just want to go ahead and do it.
Chinese stocks slump
The Shanghai Composite Index fell 2.7 percent, the most in three weeks, after data released over the weekend pointed to continued slowing of the Chinese economy. Fixed-asset investment was shown to be increasing at the slowest pace in fifteen years as the government announced new plans to reform state-owned enterprises.
Euro-area industrial production
Industrial production in the euro area increased at its fastest pace since February, rising 0.6 percent, well ahead of economist expectations of a 0.3 percent increase. With a Bloomberg survey showing that further easing from the ECB is expected by June next year at the latest, it is no wonder that strategists are bullish, expecting the Stoxx Europe 600 to climb 18 percent in 2015 which means the gauge will have to jump 13 percent in the next four months.
The refugee crisis in Europe continues with EU ministers set to sign off on proposals for granting asylum to 160,000 refugees. Over the weekend, Germany temporarily reintroduced border controls along its frontier with Austria in an attempt to stem the influx, a move which curbs the free movement of people within the Schengen open-border area.
British Labour elect leader, Australia might get one
As expected, left-wing Jeremy Corbyn was elected the new leader of the British Labour party in a landslide over the weekend. One of his first moves as leader was to appoint his shadow cabinet where he installed John McDonnell, an opponent of Bank of England independence to the role of shadow chancellor. Meanwhile in Australia, Prime Minister Tony Abbott is fighting for his job following a leadership challenge from former minister Malcolm Turnbull. Polls show Turnbull is three times more popular with voters, and is considered a favorite for the position.
What we've been reading
This is what's caught our eye over the weekend.
- Was Tom Hayes running the biggest financial fraud in history - or is he just the fall guy?
- Who will work that extra shift to pay pensioners in Japan? The robots.
- Airbus opens a factory on Boeing's home turf.
- Even the guy down the pub wants to know what's happening in China.
- Google hires auto-industry executive to head up driverless car effort.
- Debunking quantitative tightening in one paragraph.
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