Markets will continue to watch for COVID-19 developments in many shapes and forms over the next week, as well as looking for how key data releases tell the story of the economic rebound.
Most notably, the health of US President Donald Trump will be a key area of concern, as will developments in the creation of a vaccine and predictions about the veracity of a second wave.
Fears of a no-deal Brexit will also keep investors on their toes, as officials digest the latest developments from the weekend following prime minster Boris Johnson and the EU’s Ursula Von der Leyen’s call.
Stories from the weekend to watch for developments in:
UK: Conservative Party conference, more Brexit, house price watch
After a weekend where Brexit talks appeared to move forward, and the future of COVID-19 restrictions still looked uncertain, the week kicks off with the Conservative party laying out its policy pledges.
The annual Tory Party conference, which has already suffered an access glitch, rolls on until Tuesday, including key note speeches by the prime minister and other cabinet figures.
Friday’s GDP numbers will also be a talking point, and offer a look at what strength the economy is rebounding at.
Since UK GDP plunged by 20.4% in April, the economy has edged its way back up due to the gradual reopening of businesses and easing of lockdowns.
August’s reading is likely to be good, following the economic success of the Eat Out to Help Out scheme.
Friday also brings UK manufacturing and industrial production numbers for August. The strong rebound for both measures in Q3 looks set to continue, meaning four consecutive months of gains expected in manufacturing.
EU: PMI watch and ECB minutes
Key PMIs across the Eurozone will give an indication on how the manufacturing sector is faring as economies recover from COVID-19 thus far.
ECB minutes will also give investors an idea of the direction the bank is going in, however there have been few signals that it will move to ease again this year.
Brexit negotiations continue to march on until mid-October.
US: Trump’s health, stimulus and the Fed
The countdown to the US presidential election has begun, as Saturday marked one month to go. Markets will be keeping a close eye on official word on the health of incumbent leader Donald Trump.
Trump was hospitalised during the weekend after testing positive for the coronavirus. US media have said his symptoms include a low-grade fever.
The hopeful Vice-Presidents will also debate, however this is less likely to be as headline-grabbing as the initial presidential debates between the Democrats’ Joe Biden and Trump last week.
Those in the market will also be keeping a watchful eye on how stimulus talks are progressing. So far, Congress has reached a stalemate over key support for unemployed Americans, and the clock is ticking following a weaker-than-expected jobs report on Friday.
Federal Reserve chairman Jerome Powell is due to speak on Tuesday to the National Association of Business Economists, where he is expected to plug the benefits of a new stimulus package. There are fears that the US’s recovery will stall if it is not pushed through soon.
FOMC minutes are also due to be released, which will give markets some indication about the direction of the rate path.
Going welI, I think! Thank you to all. LOVE!!!
— Donald J. Trump (@realDonaldTrump) October 3, 2020
Key data releases to watch in the US are September’s consumer confidence index release, the Markit manufacturing index and employment data.
Key data releases
Tues: Consumer confidence index (September)
Wed: ADP employment report
Pending home sales index
Thurs: Core inflation, consumer spending, personal income (Aug)
Markit manufacturing index (Sept)
Fri: Nonfarm payrolls, unemployment rate, factory orders
Elsewhere, the Reserve Bank of Australia will give a verdict on its rate decision, China is on holiday until Friday and pre-voting starts for New Zealand’s 17 October election.