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The Week Ahead: How Low Can Interest Rates Go?

The earnings season is now over, which means that investor attention will probably turn to economic matters.

The Jackson Hole symposium on Sunday could provide some useful clues for the direction of US interest rates. The meeting of the who’s who of central bankers could give a platform for US Fed chair, Jerome Powell, to outline his intentions for the Fed fund rate.

Japan will report consumer prices inflation for July, which is expected to register another low reading of 0.6%. That should be more than enough for the Bank of Japan to justify its continue along its patch of monetary easing.

Japan will also report its trade balance with the rest of the world. Both imports and exports are expected to show a decline, which could push the country into a negative trade balance.

Thailand is also expected to announce a drop in both exports and imports, which could have led to a drop in its trade surplus with the rest of the world.

And finally, the central bank of Indonesia will announce its latest interest-rate decision. Last month, the bank lowered its 7-day reverse repo rate by 0.25% to support growth amidst lower expectations for inflation.

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