The London Stock Exchange will not trade today (19 September) due to the state funeral of Queen Elizabeth II. Markets in other Commonwealth countries also plan to mark the monarch’s death by announcing public holidays in the coming days. Due to this, global trading is expected to be relatively quiet.
The US Federal Reserve (FED) is expected to hike interest rates by 75 basis points this week and keep to its hawkish stance, while markets are split between the Bank of England (BOE) hiking 50 or 75 bps. The Bank of Japan (BOJ), meanwhile, is expected to keep to its accommodative policy and leave its rate unchanged. The South African Reserve Bank (SARB) will also announce its interest rate decision this week as the market expects the repo rate to be raised by 75 bps, from 5.50% to 6.25%.
Locally, Eskom says South Africans should brace themselves for escalating power cuts this week. The grid has come under immense pressure, as it is suggested that blackouts could extend to stage 6. Stage 6 blackouts equate to at least six hours without power per day, in two-hour cycles.
Looking at the week ahead: All eyes will be on the FED’s interest rate decision on Wednesday; as well as the SARB, BOE and the BOJ decisions on Thursday. The focus will remain on interest rate decisions throughout the week, as 16 central banks in total will announce their rate decisions.