Central bank meetings in focus this week

Hopes US-China trade talks resuming this week will boost global growth and encouraging earnings reports helped overcome the cautious mood which reigned global markets the previous week. The S&P 500 rebounded 1.6% while the ICE US dollar index advanced 0.9%.

All but the Hang Seng of the six largest developed market indexes advanced last week. Nasdaq recorded the biggest gain: it rallied 2.3%. All but the Canadian dollar out of six major currencies reversed previous week’s dynamics, while the range of major currency pairs’ weekly fluctuations widened. The Swiss franc was the leader in terms of percentage change: it gained 0.8% against the US dollar.

The highlights of busy calendar of events this week are the Federal Reserve’s policy meeting and July jobs report on Friday. Markets have priced in a quarter point rate cut this Wednesday. Bank of Japan rate decision and Bank of England interest rate decisions are due on Tuesday and Thursday respectively. Chinese and American negotiators will meet Tuesday for two days of talks, with no signs pointing to prospect of quick progress after three months negotiations broke down.