Investing.com – Here’s a preview of the top three things that could rock markets tomorrow.
1. U.S. Trade Data, Beige Book in Focus
With no end in sight to the U.S.-China trade war, the U.S. trade data for August may take on added importance.
The Commerce Department will release the latest trade balance figures at 8:30 AM ET (12:30 GMT). On average, economists expect that the U.S. trade deficit narrowed to $53.50 billion in August, according to forecasts compiled by Investing.com.
Attention will then likely shift to monetary policy, with the release of the Federal Reserve’s beige book at 2:00 PM ET.
With just two weeks to go until the Fed is widely expected to cut interest rates by a quarter point, investors are likely to look at the Fed’s beige book for a readthrough on the underlying strength of the economy and clues about monetary policy measures.
In addition, Minneapolis Fed President Neel Kashkari, New York Fed President John Williams and Chicago Fed President Charles Evans speak at events Wednesday that could shed light on the Fed’s direction for rates.
2. Loonie Watch: BoC Rate Decision
With the Bank of Canada on Wednesday expected to leave its benchmark rate unchanged at 1.75%, the accompanying monetary policy statment due at 10 AM ET (14:00 GMT) will come under scrutiny.
A tweak to the final paragraph in the statement “the degree of accommodation being provided by the current policy interest rate remains appropriate” to language that suggests the policy rate has become somewhat restrictive would likely indicate the central bank has turned more dovish, Scotiabank said in a note to clients.
But the BoC may be forced to cut rates in the not too distant future as slowing global growth will likely slow the Canadian economy, RBC said.
“We continue to expect the Canadian central bank will follow other global peers with a rate cut,” RBC said.
“Probably not at next week’s policy decision but with the risks tilted to an earlier cut than the Q1-2020 move we have in our current base case,” it added.
USD/CAD ended the day roughly unchanged, trading at around C$1.3330.
American Eagle Outfitters Earnings Due
Earnings are thin on the ground this week, but there will be a quarterly report from American Eagle Outfitters (NYSE:AEO) before the opening bell.
With about 30% of its goods imported from China, American Eagle is expected to report a decline in earnings as the ongoing U.S.-China trade war and global recession fears will likely weigh on growth.
But there is some hope that top line growth will be boosted by the retailer’s American Eagle and Aerie brands.
The apparel retailer is expected to report earnings of 32 cents a share, down from 34 cents a year earlier, on revenue of $1.01 billion, up from $964.85 million a year earlier.
Shares are off 15.8% this year.