Stocks in the U.S. and Europe were lower last week as strong US economic data and rising oil prices weighed on the outlook for inflation and kept pressure on central banks.
US data last week showed that ISM Services PMI rose unexpectedly to 54.5 in August. The price of US Crude Oil rose to its highest level since November.
US inflation data for August will be released this Wednesday, and the next Fed decision is due next week. Investors expect the Fed to keep interest rates on hold this month but further out remains in doubt.
A statement from Japan’s central bank over the weekend indicated that the era of negative interest rates for the country may be coming to an end. This would be another significant development for investors to weigh.
In the UK, Bank of England governor, Andrew Bailey, said he expects inflation to “fall quite markedly” and with regard to interest rates, suggested that we are “much nearer now to the top of the cycle”.
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