The historic summit between President Trump and North Korea’s Kim Jong Un should create a positive backdrop, but it’s central banks, particularly the ECB, that could be more market-moving.
Markets are counting on a successful summit between President Donald Trump and North Korean leader Kim Jong Un when the two hold a historic meeting in Singapore on Tuesday.
But expectations are low for a detailed plan, laying out denuclearization on North Korea’s part. Strategists mostly expect a positive spin and a prelude to future discussions and maybe even a promise to visit each other’s capitals. Negative for markets would be if, for some reason, talks break down.
Both the Federal Reserve and European Central Bank meet in the week ahead, with the Fed’s two-day meeting ending Wednesday and the ECB rate meeting Thursday. The Fed is expected to raise interest rates a quarter point, but the one to watch is the ECB, since it could signal an end to its quantitative easing, or asset purchases. That could have a wide-ranging impact on global interest rates, as European rates should begin to move higher.
There are also important U. S. data, including the consumer price index, which comes as the Fed begins its two-day meeting Tuesday, and retail sales on Thursday.
Trade headlines could continue to dominate as the U. S. is talking trade with China but also was to have laid out a list of goods that will be tariffed by Friday. The G-7 leaders meeting was to have wrapped up over the weekend, and leaders were at odds with Trump over trade heading into that meeting.
Robert Sinche, chief global strategist at Amherst Pierpont, said the CPI could be a big market mover in the coming week, since his firm is expecting headline consumer inflation to rise to 2.
