Big week ahead with key events likley affecting the markets, with banks reporting quarterly earnings to UK publishing meeting minutes and employment data.

1. US inflation numbers

Another increased inflation reading last Thursday occurred as a result of more hawkishness form the Federal Reserve. Friday’s jobs report highlighted that the labour market remains healthy despite the Fed’s to tame inflation by weakening growth.  

While analysts are expecting the headline rate of inflation to moderate, core inflation is expected to accelerate in September. This would keep the Fed on track for a fourth 75 basis point rate hike in a row. 

Retail sales results on Friday are expected to show a slight rise for September as auto sales rebound. 

2. Big bank earnings 

Big US banks are to start report quarterly corporate earnings on Friday as concerns grow over the rising interest rates. 4 of the largest lenders in the US: JPMorgan Chase; Wells Fargo; Citigroup and Morgan Stanley are due to report Q3 earnings ahead of Friday’s trading session. 

Economists expect the data to illustrate a dip in net income after market volatility hit investment banking activity and lenders set aside more funds to cover losses from borrowers who stack up late payments. 

3. Oil prices

Oil prices seem like they will continue in the spotlight after rallying to 5-week highs on Friday, regardless of the stronger dollar, and after OPEC+ decision to cut oil production during stiff US pressure to keep global oil prices low. 

The OPEC+ plans to lower its output target by 2 million barrels per days ahead of a European Union restriction on Russian oil, putting huge pressure on supply in an already tight market. 

4. UK data 

The BoE financial policy committee is to publish meeting minutes on Wednesday. The committee supervised last month’s emergency intervention to stabilise bond markets after the government’s mini budget, and the meeting could provide some insight into the risks facing pension funds and the implications of higher mortgage rates. 

The UK is to publish employment data for August on Tuesday, followed a day after by GDP numbers for August along with data on industrial output and trade balance.