Expect markets to remain at last week’s levels of raised volatility for the final week of the third quarter with investors keeping an eye on fresh economic data for the US including the ISM Manufacturing PMI and PCE inflation. Fed Chair Powell will also testify on Coronavirus and CARES Act before the Senate and lawmakers will try to pass a funding plan to avoid a government shutdown on October 1st.
The Evergrande limbo is set to continue as markets expect an update on interest payment for a dollar-denominated bond and hope a default could be avoided. The 2-days ECB Forum on Central Banking will be keenly watched for more clues on the monetary policy outlook and traders will also pay attention to the outcome of the German federal election.
Here’s what you need to know to start your week.
The immediate support to watch for $SPX this week remains at 4,375 level. A weekly close below 4,375 level would point to further weakness for the month of October, which is considered to be a time when stocks historically decline, giving rise to the term the ‘October Effect.’
