Macroeconomic/ geopolitical developments

• As August ended, US and global stock markets saw mixed but overall positive gains, with light trading in the US and a strong rally in European and Asian markets, while some Chinese stocks lagged due to disappointing earnings.
• Despite surpassing Wall Street’s revenue and profit projections, Nvidia’s stock fell as investors questioned the sustainability of its rapid growth amid high market expectations and potential challenges ahead.

• The PCE price index rose 0.2% in July, slightly below annual expectations but reinforcing the likelihood of a Federal Reserve rate cut, as inflation remains stable and consumer spending is strong.
• With U.S. markets closed for Labor Day, investors are focused on the upcoming August jobs report, expected to show a rebound in nonfarm payrolls and a slight drop in unemployment, as the Federal Reserve prepares for potential interest rate cuts starting in September.

Global financial market developments

• US and global equity averages extended slowly higher, with some markets hitting record levels
• US and European bond were little changed on the week, but nudged to lower prices/ higher yields
• The US Dollar Index rebounded from a multi-month low
• Gold futures consolidated slightly lower from an all-time high
• Oil futures sold off back to the lower end of the recent, broader range

Key this week

Central Bank Watch: The main Central Bank activity this week is the Bank of Canada Interest Rate Decision and Monetary Policy Statement on Wednesday.

Macro Data Watch: The main macro data release this week is the US Job data on Friday. Some other releases of note are the Global PMI throughout the week, US Factory Orders on Thursday and UK and EU Retail Sales.

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