Skip navigation Scroll to top
Scroll to top

LGT Navigator: After the ECB's interest rate decision is before the Fed's interest rate decision

September 16, 2019

After outgoing ECB Chairman Mario Draghi pulled out all the stops on monetary support last week, US Federal Reserve Chairman Jerome Powell is now in the focus of attention. The Fed is expected to deliver a further rate cut on Wednesday, but this will not meet all expectations.

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.

Stronger than expected US economic data

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).

Trade Conflict – more carrot than whip again

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.

Johnson's "Road to Canossa"?

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.

Economic Indicators September 16

MEZ Country Indicator Last
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

Earnings Calendar September 24

Country Corporate Period
US Nike Q1



Follow us on TwitterFacebook or LinkedIn, where we inform you about latest market developments and LGT News. Further informationen is available on: LGT Social Media.

LGT Research Publications subscription 

Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail:
Source: LGT Bank (Switzerland) Ltd.

Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is for your information only and is not intended as an offer, solicitation of an offer, or public advertisement to buy or sell any investment or other specific product. Its content has been prepared by our staff and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its being correct, complete and up to date. The circumstances and principles to which the information contained in this publication relates may change at any time. Information that has been published should therefore not be understood as implying that no change has taken place since its publication or that it is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax-related or other consulting matters, nor should any investment decisions or other decisions be made on the basis of this information alone. It is recommended that advice be obtained from a qualified expert. Investors should be aware that the value of investments can fall as well as rise. Positive performance in the past is therefore no guarantee of positive performance in the future. Investments in foreign currencies are also subject to fluctuations in exchange rates. We disclaim all liability for any loss or damage of any kind, whether direct, indirect or consequential, which may be incurred through the use of this publication. This publication is not intended for persons subject to legislation that prohibits its distribution or makes its distribution contingent upon an approval. Any person coming into possession of this publication shall therefore be obliged to find out about any restrictions that may apply and to comply with them. In line with internal guidelines, persons responsible for compiling this report are free to buy hold and sell the securities referred to in this report.

Herausgeber: LGT Bank (Schweiz) AG, Glärnischstrasse 36, CH-8027 Zürich
Redaktion: Alessandro Fezzi, +41 44 250 78 59, E-Mail:
Quelle: LGT Bank (Schweiz) AG
Core Personal Consumption Expenditure
MEZCountryIndicatorLast08:00DERetail Sales (y/y)-1.7%08:45FRConsumer Prices EU Harmonized (y/y)1.4%09:00ESGDP (y/y)2.4%09:55DEUnemployment Rate5.0%11:00EUGDP (y/y)1.2%11:00EUCore Consumer Prices (y/y)1.1%11:00EUUnemployment Rate7.5%11:00ITConsumer Prices EU Harmonized (y/y)0.8%12:00ITGDP (q/q)0.12%14:15USADP Employment Report102k20:00USFederal Funds Target Rate2.5%