After a week of volatility due to the China and U.S. trade brinkmanship, markets will be focused on domestic and global economic indicators. Although the risk for headline volatility remains significantly elevated, markets will most likely be driven by economic indicators to determine the extent of the slowing global economy.
In the U.S., inflation data will be closely scrutinized for an indication of whether the Federal Reserve will reduce interest rates in September. Later this week, German GDP growth will be released. Many expect the economy to have contracted during the last quarter as a manufacturing slowdown weighs on growth.
As global interest rates continue to fall, economic fundamentals will likely drive market direction. With approximately $15 trillion of debt trading at negative interest rates, the risk for economic challenges continues to grow.
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