A look at the day ahead from Sujata Rao.

This week was huge in terms of monetary policy. There were 16 meetings at central banks and the possibility for the first ever rate rise from a developing nation, Norway. However, it is possible that other central banks will follow suit. The Federal Reserve might not be able to increase its rate soon enough. Japan, Switzerland, and Japan will likely remain cautious.

Other sagas, however, are keeping investors’ eyes on the market. Evergrande, a Chinese property developer, is on an inexorable path to default. This has pushed Hong Kong stock prices down (mainland market are closed) and raised yields on Chinese junk bond bonds to 14%. It’s the highest level in nearly a decade.

So it’s a firmly risk-off on Monday with European and U.S. equity futures down 1%, following Friday’s dismal session when the plunged nearly to one-month lows and the volatility gauge surged to a one-month high.

This is largely due to worries about economic growth and inflation as well as the ongoing debt ceiling negotiations in Congress.

The second issue is spiralling gas costs and potential inflation.

These have already pushed some power producers out-of-business and closed fertiliser plants across Britain. The knock-on effect is likely to have a negative impact on a variety of sectors, including supermarkets and slaughterhouses. It will also lead to higher winter heating bills.

The pressure on the authorities is increasing — Britain has plans to protect consumers and businesses, and U.S. companies are calling for a halt on exports of liquid gas (LNG). The politics factor is also important — EU legislators have asked authorities to investigate Russia’s Gazprom for manipulation of the market.

British wholesale gas prices soar https://graphics.reuters.com/GLOBAL-GAS/jnvweyxqmvw/chart.png