Mon, 26th June 2017

Anirudh Sethi Report


Next week: US shutdown, Fed minutes and IMF meeting

Washington will again be the city to watch next week. There’s the ongoing US shutdown, the looming debt ceiling and the annual meetings of the World Bank and the International Monetary Fund.

Here’s a summary of what to watch for next week:

US government shutdown/debt ceiling:

Unless Congressional leaders conjure up an agreement over the weekend, the partial shutdown of the US government will enter a second week.

As it does, the October 17 deadline for raising the $16.7trillion debt ceiling looms larger.

So far, some 800,000 government workers have been furloughed and economists at Barclays estimate the shutdown will shave 0.12 percentage points from fourth-quarter GDP for each week it persists.

Central banks:

It’s a busy week for central banks, with the Federal Reserve in focus. Investors will be keen to scrutinise the minutes of the Fed’s Open Market Committee in September, when the central bank unexpectedly decided not to cut its stimulus plan. The minutes are due on Wednesday.

Across the Atlantic, the Bank of England’s Monetary Policy Committee gives its latest decision on interest rates on Thursday.

International Monetary Fund and World Bank meetings:

The IMF and the World Bank hold their annual meetings in Washington, starting on Friday. The IMF is expected to release fresh forecasts for economic growth. IMF managing director Christine Lagarde will speak later in the week, followed by policymakers of several G-20 nations.

Third-quarter US earnings season:

Third quarter earnings season starts in earnest, with banks and retailers in focus. JP Morgan and Wells Fargo will report on Friday, following results from Costco, Family Dollar, Alcoa and Yum Brands earlier in the week.

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