How far will the Federal Reserve raise US interest rates by this time? As he mobilizes 300,000 reservists for his war in Ukraine, Vladimir Putin raises the nuclear sword, raising the cost of dollars and gas in Europe. Existing home sales are expected, as Lennar announces its quarterly financial results. UK Prime Minister Liz Truss is preparing a new energy relief package, and the US government will release its weekly oil stockpile with concerns about an increase in global oil demand. What you need to know about the financial markets on September 21 is listed below.
[insertAds]1st Factor can moving markets : Putin raises the stakes with limited mobilization
In a move that shocked the West on Wednesday, Russian President Vladimir Putin announced a partial mobilization of his country’s two million-strong military reserves, and reiterated his goal of annexing regions of Ukraine now under Russian occupation.
Putin stated that only those with previous military service, relevant experience and training would be eligible for mobilization. Defense Minister Sergei Shoigu stated in a subsequent televised speech that this would hardly affect 300,000 people.
The Kremlin has made a big change with the measure, which can be interpreted as a reaction to recent setbacks on Ukraine’s front lines and signs that its influence on the continent’s energy markets may be waning as European gas prices fall.
[insertAds]2nd Factor can moving markets :Home sales and job cuts stats are expected in Gap.
Stocks are expected to start the day higher.
Despite the drama in Russia, US stock indices are expected to open slightly higher but remain virtually in wait mode ahead of today’s Federal Reserve meeting.
By 06:40 ET, Nasdaq 100 futures were mostly flat, S&P 500 futures were up 0.2%, and Dow Jones futures were up 70 points, or 0.2%. The three major monetary indices saw a loss of about 1% on Tuesday due to pre-Fed concerns.
Homebuilder Lennar (NYSE: LEN), which is publishing results on the same day expected for current home sales data for August, is one stock likely to shed light later. It’s also time for General Mills (NYSE: GIS) to report.
[insertAds]3rd Factor can moving markets :Decision Day at the Federal Reserve
The Federal Reserve is expected to raise US interest rates again, with the market split on expecting a full percentage point or 75 basis point increase, as it was last time. Although the consensus is still – almost – 75, some analysts have switched to the latter after another positive surprise in US inflation in August.
In my opinion, the Fed’s so-called “point chart,” which depicts where officials estimate rates over the next two years, is likely to be more important. This should indicate how far the central bank believes prices will need to rise and how long it can be said to have defeated inflation. Short term interest rate futures contracts.
Energy saving in the UK and the nationalization of Uniper
Liz Truss, the UK’s next prime minister, has unveiled a relief program for businesses to help them pay for their energy costs this winter. For six months, the package will cap the price of gas and electricity at roughly half the current spot market price. After that, a more restrictive relief plan will be implemented.
The initiative, expected to cost 40 billion pounds ($45.5 billion), is Truss’ second largest financial initiative to tackle the energy crisis. In response, the pound fell to a new 37-year low as statistics released earlier revealed a significant increase in public borrowing as a result of higher interest rates.
[insertAds]Germany added another casualty to Europe’s energy crisis by agreeing to nationalize Uniper (ETR: UN01), the country’s largest gas supplier, whose finances have been devastated by Russian supply cuts.
In addition, in order to help companies survive the winter, French Finance Minister Bruno Le Maire has asked the European Union to put forward plans to relax regulations governing state aid.
Putin’s factor raises oil prices. EIA statistics awaiting
After Putin’s statement, the market quickly adjusted its prices to reflect a larger geopolitical risk premium.
US oil futures rose 2.4% to $85.95 a barrel by 06:40 ET, while Brent crude futures rose 2.3% to $92.74 a barrel.
A 2.16 million barrel increase in crude oil stocks is expected in the US stockpiles statistics for the previous week, leaving aside nuclear supply. With an increase of just over a million barrels, data from the American Petroleum Institute, which was announced on Tuesday, fell short of expectations.