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The Week Ahead: Sino-US Trade Dispute Set To Escalate

If we thought that the Sino-US trade dispute could be resolved by next week, then we could be disappointed. China has put a spanner in the works by pulling out of talks with America. So, it looks like the new tariffs on US$200 billion worth of Chinese imports into America will go ahead on Monday.

The US Fed will announce its latest interest-rate decision in the early hours of Thursday morning. It is almost a nailed-on certainty that the rate-setting committee will announce a quarter point hike in the Fed Fund rate to between 2% and 2.25%….

…. in August, policymakers said the labour market has continued to strengthen and that economic activity has been rising at a strong rate. That would suggest another rate hike before the year is out, and perhaps three more next year.

China will report those closely-watch purchasing managers’ indices towards to the end of next week. It is expected to show that both the manufacturing and services sectors are still expanding but at a slower pace.

Bank of Japan governor, Haruhiko Kuroda, will speak at a meeting of business leaders in Osaka. He is expected to touch on monetary policy. He might provide some indication as to when the central bank could start normalising interest rates.

The European Union is expected to say that the rate of inflation remains steady. Core inflation could have crept up to 1.2%, whilst the headline rate is expected to have edged up to 2.2%.

It is time for the central bank of Indonesia to discuss interest rates again. It has already raised interest rate four times in three months to support its falling currency. Another rate hike is expected next week, which would take the reverse repurchase rate from 5.5% to 5.75%.

And finally, Singapore’s bank lending numbers could support its three listed banks, namely, DBS (SGX: D05), UOB (SGX: U11) and OCBC (SGX: O39). Last month, bank lending dipped to a four-month low, as lending to businesses declined and consumer loans edged lower. But lending could have bounced back to S$675 billion in August.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo owns shares in DBS, OCBC and UOB.