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LGT Navigator: Central banks continue to set the tone

September 12, 2022

Stock markets are currently showing their friendly side. Monetary policy remains in focus. While further significant monetary policy decisions will follow next week, the publication of the latest US inflation data is in the spotlight this week.


On capital markets, the focus remains on the further development of inflation, interest rates and recession fears as well as geopolitical and energy-related uncertainties. The focus now shifts to the inflation data from the US due on Tuesday, which will receive particular attention in the run-up to the next monetary policy direction decision by the Federal Reserve (September 21). Meanwhile, the Bank of England has postponed its interest rate decision to September 22 because of the national mourning for the late Queen Elizabeth II. On the same day, the Swiss National Bank is also expected to set its monetary policy course. 

In Asia, stock exchanges in Hong Kong and Shanghai are closed on Monday for a holiday. Meanwhile, in Tokyo, the Nikkei climbs more than +1%. Among the winners are shares from the travel industry, which benefit from the fact that the Japanese government apparently wants to relax entry restrictions.

The New York stock exchanges have closed on a friendly note on Friday. The Dow Jones climbed +1.9% and recorded its first weekly gain in three weeks (+2.7%). The S&P 500 gained +1.5% and the Nasdaq Composite advanced +2.1%. 

Bundesbank chief Nagel: ECB must accept recession risk

According to Bundesbank President Joachim Nagel, the European Central Bank (ECB) must not be distracted by the risk of recession in its fight against record-high inflation. In the end, stable prices are ultimately much more important for medium- and long-term growth, Nagel said. "It may also be necessary to endure a rough period." The German central bank chief also expects inflation to accelerate further, rising above +10% in December, but prices should then have peaked. In 2023, too, annual inflation is likely to be significantly too high at more than +6%, Nagel commented.

SNB takes positive view of ECB's interest rate move

The ECB's decision to raise key interest rates further was welcomed by the SNB’s President Thomas Jordan. "The ECB's interest rate step is important and also supports the SNB's monetary policy," the SNB chairman said at a financial forum in Zurich on Thursday. He added that the further inflation trend was highly uncertain and that the situation on the energy markets would also influence inflation expectations. The SNB will also consider the impact on the economy when fighting inflation, Jordan stressed, adding that against the backdrop of high inflation, the strong franc is currently "doing more good than harm."

Economic Indicators September 12

MEZ Country Indicator Last period
08:00 UK Industrial Production (July, m/m) -0.9%
10:00 IT Industrial Production (July, m/m) -2.1%


Earnings Calender September 13

Country Company Period
US Twitter extraorord general meeting
US Starbucks Investor Day


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