LONDON (Reuters) -Another batch of closely-anticipated U.S. jobs data, a high-level gathering in China, political upset in France and a blockbuster trial in Brazil are coming up.
It’s time to catch up with that post-summer read in.
Here’s your week ahead in global markets by Lewis Krauskopf in New York, Rae Wee in Singapore and Anousha Sakoui, Dhara Ranasinghe and Marc Jones in London.
1/ WORK DISPUTE
The next U.S. jobs report on September 5 could cement expectations of an impending Federal Reserve rate cut.
The August non-farm payrolls report is expected to show growth of 78,000 jobs, according to a Reuters poll, versus 73,000 for July.
Last month’s weak report, which included huge downward revisions for the prior two months, heightened market expectations the Fed will ease rates in September.
Fed Chair Jerome Powell appeared to support those expectations at his Jackson Hole speech, saying that risks to the job market were rising.
The jobs data coincides with wariness about threats to the Fed independence after President Donald Trump set about trying to fire Fed Governor Lisa Cook.
2/ POWER PLAY
Over 20 world leaders gather at a regional security forum in China come Sunday, in a powerful show of solidarity when Trump is seeking to double down on his vision of U.S. supremacy.
Russia’s Vladimir Putin, welcomed back onto the world stage by Trump in August, joins the Shanghai Cooperation Organization summit in Tanjin. The event also marks the first visit to China by India’s Narendra Modi in over seven years.
Days later, Chinese President Xi Jinping hosts North Korean leader Kim Jong Un at Beijing’s “Victory Day” parade.
Markets should pay attention as Xi looks to position China as a global force in a shifting geopolitical landscape. China has increased deployments around Taiwan and the disputed South China Sea.
Another round of China PMI releases meanwhile is expected to show the economy continues to struggle.
3/ BACK TO SCHOOL
Pack away the beach towels and stow the deck chairs, summer (in most places) is over. Markets sense it too.
In a foretaste of the pick-up in activity in September, French markets sold off this week on political turbulence and the Treasury curve steepened after Trump said he would fire Cook.
France’s Prime Minister, trying to get budget-cut plans across the line, has called a no-confidence vote for September 8. He is expected to fail.
At the same time, the September Fed meeting will take place against growing angst about central bank independence.
So, that’s two already on the September market risks check-list.
Stock markets near record highs, smack of complacency, and bond markets – where plenty of risk is priced in – are unlikely to breathe soon.
4/ BACK WITH A BANG
The value of global mergers and acquisitions has hit highs not seen since the 2021 post-pandemic boom. Despite earlier market turmoil and a reduced number of transactions, by the end of the year, we could be near the $4 trillion in deals forecast by some dealmakers last year.
Tariff-driven expansion, sector consolidation and cross-border strategic alliances are some of the drivers. Keurig Dr Pepper’s $18 billion takeover of JDE Peets highlights how companies may be navigating rising U.S. tariffs.
And the takeover of UK assets by largely U.S. bidders will likely continue given an ongoing valuation gap between the two regions. While some deals have taken longer to get done, downward pressure on rates and a strengthening macro environment will support M&A momentum, says BNP Paribas’s UK head of advisory Kirshlen Moodley.
5/ HIGH STAKES
Brazil’s high stakes trial of former President Jair Bolsonaro enters its final stretch on Tuesday, with the far-right leader and seven of his closest aides accused of plotting a coup to overturn the 2022 election result.
If found guilty, he could face over 40 years in jail. For markets, the immediate issue is that it could further rile Trump who has already imposed 50% tariffs on Brazilian goods for what he calls the “witch hunt” against Bolsonaro.
Some of Brazil’s biggest exports, such as aircraft, energy and orange juice, have so far avoided the tariffs, so the concern is that Trump could turn his attention to them.
A parallel case at Brazil’s Supreme Court is investigating Bolsonaro and his son, congressman Eduardo Bolsonaro, for trying to pressure justices to acquit the former president.
That is crucial too as it could mean there is no Bolsonaro on the ballot for next year’s election and Trump’s attacks seem to have lifted current Brazil President Luiz Inacio Lula da Silva’s popularity rating.
(Compiled by Dhara Ranasinghe; Graphics by Prinz Magtulis, Alun John and Marc Jones, Editing by Barbara Lewis)
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