Investors are eagerly awaiting the Fed's interest rate decision this evening and the subsequent FOMC press conference with Jerome Powell. In the run-up to the central bank event, market participants are likely to keep a low profile. Hopes are high that the Fed will turn the interest rate screws downwards for the first time this year and possibly hold out the prospect of further rate cuts.
Donald Trump's state visit to the UK could also cause movement.
DAX
Source: TradingView
Eurozone inflation slightly lower than expected
New figures on euro inflation are likely to have been of relevance this morning, which at 2.0% in August (compared to the same month last year) were somewhat lower than previously expected. According to Eurostat, the rate of inflation was thus as high as in July. Economists had previously expected a rate of 2.0%.
Last week, the European Central Bank (ECB) paused interest rates and left the key deposit rate at 2.0%. ECB President Christine Lagarde had kept a low profile with regard to potential interest rate cuts.
Investors hope that the US Federal Reserve will cut interest rates
The announcement of the key interest rate decision along with interest rate and economic projections is expected at 20:00 this evening.
The press conference with Fed Chairman Jerome Powell follows at 20:30, which will be tapped for monetary policy clues.
According to current information from the CME Group's "Fed Watch Tool", the chance of a rate cut of a quarter of a percentage point is 96% and for a 50 basis point cut is 4.0%. The interest rate band itself currently stands at 4.25 to 4.50 percent.
The US Federal Reserve plans to decide on the future key interest rate level this year on October 29 and December 10.
Bank of England to decide on interest rate level on Thursday - Trump to visit the island
The results of the Fed meeting could continue to have an impact on Thursday.
It will also be interesting to take a look at the UK when the Bank of England (BoE) announces its key interest rate at 13:00.
US President Donald Trump is also on a state visit to the island. It is possible that Trump and Prime Minister Starmer could discuss issues relating to Ukraine, NATO and the economy.
Weekly initial claims for US unemployment benefits in view - speech by Mary Daly rounds off the week
In a generally manageable economic calendar, the weekly initial claims for US unemployment benefits, which could provide monetary policy signals (14:30), should also be noted on Thursday afternoon. The development of the job market is likely to be important, as it is currently developing strangely weakly. In August, only 22,000 new non-farm jobs were created in the world's largest economy.
Producer prices are on the daily agenda for Friday in Germany (08:00).
A speech by Mary Daly from the central bank branch in San Francisco is expected on Friday at 8:30 pm.
