The military conflict in the Middle East over the weekend has added to the list of geopolitical worries, and led to a fresh bout of volatility across financial markets. The hostilities escalated when militants affiliated with Hamas initiated a large-scale attack against Israel. These tragic developments have led to a significant human toll, and raised grave concerns about an extended conflict. Somewhat ominously, last Friday marked 50 years since the Yom Kippur War started. This armed conflict also began with a surprise attack against Israel and it was a catalyst for this oil shock. Are we headed for another stagflationary period like the 1970s, and what might this conflict mean for investors?

We're back after a week away and there's no shortage of action across financial markets to talk about! Another busy week looms, with a crucial inflation report due in the US just as bond yields hit 15-year highs. We'll also see the September quarter global reporting season begin, with some of the financial heavyweights set to release earnings reports late in the week. On the local front, the election will take centre stage on Saturday. Will we see a change of government, what could that mean for investors, and how might Winston Peters feature in the outcome?

When it comes to investments, shares and property get most of the attention. However, fixed income is equally as important to the average investor, making up somewhere between 20 and 40 per cent of the typical diversified portfolio. Bonds have been doing it tough since the pandemic, with interest rates moving sharply higher from near-zero levels. However, a tipping point may soon be upon us, and those headwinds might become tailwinds. This time next year interest rates could well be lower than they are today and if that happens, some savers might find themselves facing much less attractive reinvestment options. It makes good sense to lock in this income at current rates, and make hay while the sun is shining.

Global inflation trends will be in focus in the days head, after a flurry of central bank decisions last week that saw the "higher for longer" interest rate theme become further entrenched. The key release will be personal consumption expenditures inflation in the US, as well as fresh inflation readings in Europe and Japan. Chinese economic indicators will also be closely watched as investors look for further evidence of a stabilisation in the economy, while on the corporate front we'll also see earnings releases from US consumer heavyweights Costco and Nike. Here in New Zealand, the key release will be the ANZ Business Outlook for September, which will hopefully reflect another improvement in sentiment and a further softening of inflationary indicators. With less than three weeks to go until the election, politics will also be in the spotlight.

It feels a little gloomy at the moment. Investors are on the sidelines, many economists seem more downbeat than usual, and the sharemarket has been uninspiring so far in 2023. There’s nothing wrong with a healthy dose of caution, is it really all bad out there? We’ve got our fair share of challenges, and the economy is still facing a bumpy path in the months ahead. It’s natural to focus on these negatives, but we’ve got a few reasons to maintain a glass half-full view as well.

Buckle up for another action packed week across financial markets! Three of the world's biggest central banks are meeting, including the Federal Reserve in the US. We've also got inflation reports due in the UK and Japan, as well as the first indicators for how economic activity is tracking in September. Here at home, we'll see the results of another dairy auction as well as the latest quarterly GDP figures. Fonterra is due to report its annual result, while the first live Leaders' Debate from TVNZ will take place on Tuesday night.

As always, there's plenty going across financial markets this week. Here in New Zealand, we’ll get the latest migration estimates, as well as electronic card spending and a fresh monthly housing report. Markets will also be watching the Pre-election Economic and Fiscal Update (PREFU) from Treasury on Tuesday. The extent of deterioration in the economic outlook and a likely increase to the borrowing programme will be closely monitored. Elsewhere, the highlight of the economic week will likely be the August consumer price index report in the US, where a rebound in fuel prices is likely to see headline inflation push higher (while core inflation remains steady). This will follow recent releases that point to progress on the inflation front, as well as signs the labour market is easing, as we look ahead to the Federal Reserve meeting next week.

China has been a powerhouse of global growth in recent decades, and investors seeking the excitement and opportunity of emerging markets haven’t needed to look much further. However, the world’s second largest economy is facing increasing challenges, bringing its credentials as an obvious investment destination into question. In contrast, India is shaping up as a highly attractive place to do business, as well as invest capital. With a very large population and favourable demographic trends, it could well be in the early stages of a longer-term boom at a time when China is quite likely ending one. In short, India’s future might look like China’s past, making it increasingly worthy of consideration for investors.

The S&P 500 in the US rose 2.5% last week, its best weekly performance in almost three months. That wasn’t enough to see the US market finish August in the green, however, with the index ending 1.8% lower for its first negative month since February. The local NZX 50 increased a more modest 0.5%, as investors digested a cautious reporting season and looked ahead to the election with some trepidation. It will be a holiday-shortened week in the US, with markets closed for Labor Day on Monday. Investors will be watching to see how Chinese markets respond to further efforts from policymakers to stimulate the economy and support the troubled property sector. On the central banking front, we'll hear from the Reserve Bank of Australia and the Bank of Canada, while here in New Zealand the results of the latest global dairy auction will be closely watched.