The Week Ahead: Banks On Tap

Rate-watchers will be poring over the minutes of the latest Fed meeting. At the September get-together, the rate setters left interest rates unchanged at between 1% and 1.25%. But they are expected to hike them another time this year. It will also start reducing its balance sheet this month.

Staying in the US, the latest inflation numbers could help determine how quickly and by how much interest rates could rise. In August, headline inflation rose to 1.9% because of higher petrol prices. The experts think it could rise to 2.3% this time.

China will report those closely-watched Caixin services and composite indices. In August they were both comfortably above 50, which would indicate expansion. Healthy expansion in both sectors could help China achieve its growth target of around 7% this year.

Double-digit inflation appears to be a thing of the past for India. In August the price of a basket of consumer goods increased 3.4%. That was below the long-run average of 6.8% and significantly below the all-time high of 12.2% in November 2013.

Singapore will report retails sales for August. The year-on-year increase in retail sales has held up remarkably well since the dip in February. Some of the better performing sectors appear to be watches & jewellery, medical goods and department stores.

The Garden City will also announce the first estimate for economic growth. It is expected to show that the economy grew around 2.9% compared to last year. Whilst the number looks good, it is still below the long-term average of 6.7%.

Earnings season kicks off in Singapore. with Singapore Press Holdings (SGX: T39) the standard bearer. In July, SPH reported a 45% drop in third-quarter profits. The owner of The Straits Times, the said bulk of the fall was due to impairment charges at its magazine business.

A handful of US banks are pencilled in for quarterly earnings. They include Bank of America, Citigroup, Wells Fargo & Co. and JP Morgan Chase. This could be a good opportunity to gauge how US lenders have been faring since the Fed started increasing interest rates at the end of last year. In general, it should benefit bank’s net interest income.

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