1 to 7 October: Political tensions and debates remain the driver of markets

As there are no major policy events scheduled for the coming week in developed economies, financial markets are going to mainly focus on inflation releases in the US and in various Euro Area member states. In addition, ongoing political noise risks volatility in asset prices, such as news related to Brexit talks, trade discussions and political tensions within the European Union about the Italian government’s lax approach to fiscal policy.

In emerging Asia, the economic diary is also very light. The data with the greatest potential to move markets will come from China, when the country releases its money supply and foreign trade statistics. The former will be a good indication of whether recent policy measures have started to impact the economy, while the latter will shed some light on the effects of trade tariffs. Latin American markets might gradually shift their focus away from Argentine crisis management and Brazilian elections, as Mr. Bolsonaro gained the largest number of votes in the first round of presidential elections. This week, inflation data are released by Brazil, Chile, Mexico. Furthermore, the Peruvian central bank holds its monetary policy meeting. In Africa, high-frequency indicators will be released, such as inflation in Tunisia and Egypt, and manufacturing performance in South Africa.

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