Six stories to rock the markets this month

Markets seem pretty relaxed about the big stories coming this September, says Bengt Saelensminde. All the more reason for investors to watch out.

04 September, 2013 Six stories to rock the markets this month Dear Buzzhairs Buzzhairs, The world's media rushed to the City of London yesterday afternoon. On Eastcheap, just around the corner from the Bank of England, a globally significant story was unfolding live… The new 'walkie talkie' skyscraper is under construction there. It has curved glass walls, which focus the sun's light into an intense beam. On Monday, the beam of light was strong enough to warp the plastic on cars parked outside. By Tuesday afternoon, a troop of reporters were scrambled to cover the story of the melted wing mirror… This is traditionally a quiet month for news and for the markets. In the headlines, you read about melted wing mirrors instead of big summit meetings and elections. The dog days of summer are coming to an end now though. And September looks like a tempest in the brewing. But the thing is, the markets seem pretty confident they're happy with what's coming. And that's what could make for an interesting September. Remember, it's not what the markets do know that causes the big moves. It's what they think they know, that turns out to be wrong that really upsets them… The problem facing everyone in Britain There's something seriously wrong with the UK financial system.   The banks - and our very own British government - have colluded to stoke up the biggest credit bubble in British history.   If and when it bursts, it could blow a hole in every British investor's portfolio… including yours.   Will your wealth survive intact? Click here and judge for yourself.   The Fleet Street Letter is a regulated product issued by Fleet Street Publications Ltd. Your capital is at risk when you invest in shares, never risk more than you can afford to lose. Please seek independent financial advice if necessary. Fleet Street Publications Ltd. 0207 633 3600. There's so much going on! We should finally find out when the Fed will taper on the 18th of September. According to the influential US economist Jim Rickards, "The Fed will taper in September, or never." The markets have been guided towards the September press conference. And anyway, with Japan in easing mode and so much money flooding out of emerging markets back to the US, now would be a good time to pull at the reins. You don't need me to tell you that a surprise "no taper" may cause a bit of commotion. It could reignite the QE to infinity debate. That outcome could be very good for gold and gold miners (mining expert Simon Popple could do very well from that – click here to see how he plans to profit). Rickards is expecting the markets to be surprised… and I wouldn't bet against him. Who knows, we'll have to wait and see. Tomorrow we'll hear more from the ECB and Bank of England. That's important because both of these central banks have been testing some new ideas lately. Come midday on these special Thursdays, it used to be that we keenly awaited just one bit of data: the central bank's key lending rate. But nowadays, we await updates on QE or any other monetary trick the central banks have come up with. On top of that, we also now look for any nuance on forward guidance… that is, how long the current batch of central bank manipulations are expected to last. The markets are pretty confident that there'll be no change here. That's the most likely outcome. But of course, that means that any surprise could really rock the markets. Friday sees the release of some important employment figures out of the US. The non-farm payrolls release is the most important bit of data to be released before the Fed's monetary policy meeting. Yes, it's back to that tapering story… basically Bernanke has linked the removal of QE to the employment numbers. Yujiro Goto, a senior currency strategist at Nomura says: "Should we continue to see nonfarm payrolls increase by about 150,000 to 160,000, the likelihood of a September tapering of Fed easing will remain intact." Three minutes with a £1bn asset manager What he has to say might shock you. In fact, if you own even one of the three assets he believes is about to collapse… You might need to take emergency action. Find out what he has to say – right here. The Price Report is a regulated product issued by Fleet Street Publications Ltd. Your capital is at risk when you invest in shares, never risk more than you can afford to lose. Please seek independent financial advice if necessary. Fleet Street Publications Ltd. 0207 633 3600. On the other hand, if the figures are bad, it'll be back to the old 'bad news is good news' for the markets. Poor employment figures would mean more Fed stimulus. Next week, there's an important meeting of Europe's top banking brass. EU finance ministers will meet a clique of central bankers and commercial bankers in Vilnius to discuss a banking union. This is crucial stuff for the survival of the euro. There could be bad news for eurozone countries' sovreignty here… or bad news for the entire euro project. We await an outcome with bated breath! On September 16th Portugal meets with the EU and IMF to discuss its overdraft position. The Portuguese have seen the Troika's softening stance towards Greece, so surely they will also demand some leeway. I suspect Portugal will drive a hard bargain. After all, nobody wants to see a flare-up just now… we've got German elections the following week! September 22nd sees the German Federal elections, the most important election day in Europe. Merkel has this one in the bag. The only thing in doubt seems to be her coalition partners. But make no mistake, there are some big issues to be debated here – and any new partner may be driving a hard bargain. According to a poll by YouGov, Germans are looking for some big changes when it comes to Europe. • 55pc of Germans believe Germany should keep the euro but that membership should be restricted to a smaller group of countries. • 32pc favour returning to the Deutschmark • 42pc say the euro is threatening the European project • 57pc say the government should not have a mandate to forgive debt from troubled countries We've seen how UKIP forced some big changes to our own coalition's policies, moving the 'centre ground' in their direction… and that was just local elections! So the German elections are not as cut and dried as they seem. So there you have it – summer is ending with a bang. There'll surely be some big surprises somewhere in that lot. Market volatility could take us either way... or probably both! The key is to hold on tight for what's bound to be a bumpy ride! Good investing, Bengt Saelensminde The Right Side PS: Got a comment on this article? 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