Meanwhile, the cracks within the ECB Governing Council are becoming more obvious. According to a Bloomberg report, the heads of the central banks of Germany, France, Austria, the Netherlands and Estonia as well as the directors from Germany, Sabine Lautenschläger, and France, Benoit Coeure, have spoken out against the resumption of bond purchases. Dutch central bank chairman Klaas Knot said bluntly that the ECB's package of measures was out of all proportion to the current economic conditions. And there are serious reasons to doubt its effectiveness. German Bundesbank President Jens Weidmann said that the ECB had gone too far in his opinion and had overstepped the mark. The ECB's easing of monetary policy should also put pressure on other central banks to lower their key interest rates. In addition to the Federal Reserve (on Wednesday), the interest rate decisions of the Swiss National Bank (SNB), the Bank of England and the Bank of Japan (on Thursday) will be in the focus of the capital markets this week.
The economic indicators released from the U.S. at the end of last week have consistently exceeded expectations. Retail sales rose by +0.4% in August compared to the previous month, twice as much as analysts had forecast on average. In addition, retail sales in July rose by +0.8%, slightly more than the initial estimate of +0.7%. At the same time, the mood of American consumers has also brightened. The consumer confidence barometer of the University of Michigan rose from 89.8 points in August to 91.0 points in September. The index for expectations was 82.4 points (previous month: 79.9 points), while the index for the assessment of the current situation was 106.9 points (105.3 points).
After several escalations of the trade dispute between the USA and China, US President Donald Trump has recently signalled an increased willingness to compromise. He could also envisage a provisional agreement with China, Trump said on Friday. Although the White House prefers a far-reaching agreement, a temporary treaty could also be considered. Beijing, too, had recently signalled its willingness to ease tensions. At the beginning of October, high-ranking delegations will meet again in Washington for talks.
The "working visit" planned for today to EU Commission President Jean-Claude Juncker in Luxembourg for British Prime Minister Boris Johnson is likely to feel almost like King Henry IV's former request to the Pope at Canossa Castle (after his excommunication). This is likely to be a further postponement of the Kingdom's withdrawal from the European Union. Just two weeks ago Johnson had said that he would rather "lie dead in the ditch" than apply for a postponement of the Brexit date in Brussels. Last Thursday, EU Parliament President David Sassoli had made it clear that the British government had so far made no new proposal or alternative for the modalities of the resignation. Sassoli also stresses that there can be no agreement on the Brexit without the so-called "backstop", which Johnson has so far strictly rejected.
|04:00||CN||Retail Sales (y/y)||+7.6%|
|10:00||IT||Consumer Prices (y/y)||+0.5%|
|14:30||US||NY Fed Empire State manufacturing index||+4.8|
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Source: LGT Bank (Switzerland) Ltd.
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