More volatility in markets today and the rest of the week thanks to the fallout of the Fed’s decision to leave its key interest rate unchanged.

On the face of it a quiet week, except for the fact that it’s the week after the Fed’s no rate move decision, and yet another test of sentiment about the health of the Chinese economy.

Joe Hockey won’t welcome the comparison, but the struggling NZ economy managed to eke out a better June quarter performance than Australia did.

Shell’s $US70 billion mega-merger with the UK’s BG Group faces new competition concerns after the ACCC surprised by hinting that it may be blocked or changes requested of the parties to win approval.

It won’t be a pretty sight on Australian and other Asian stockmarkets today – watch for losses and some volatile trading after the Fed’s decision to leave US rates alone.

Just one sleep – well a partial sleep to go before we learn the fate of American interest rates – will the Fed sit or will it lift?

Ahead of tomorrow morning’s interest rate decision by the US Federal Reserve, and driven by growing fears about a Chinese recession, big global investors are hunkering down.

US shares ended with a rally based on the growing belief that the US Federal Reserve will not cut rates.

If anything the minutes of the Reserve Bank’s September board meeting have been more apposite by events in the two weeks since the discussions took place. China’s wobbling is a growing international downside risk, as we saw with another day yesterday of volatile trading and falls on Chinese stockmarkets.

The change of leadership in Canberra won’t have any impact on financial markets today – they remain focused on the Fed meeting in Washington and by the latest wobble in China’s markets.

Oil and gold sold off last week, but industrial metals led by copper, ended up with surprise gains, even though the August trade data from China was weak.

So, if you are looking for a reason for the US Federal Reserve to sit and do nothing about interest rates at this week’s meeting, is it the weak economic data for August from China, culminating in the less than impressive reports for August?

Yes, there have been big weeks this year for financial markets, with lots of data such as the US jobless figures, central bank meetings to contend with, not to mention the rise in market volatility, and the usual monthly and quarterly data drops from China.

Don’t expect too much support for shares this week – in fact the odd sell-off could be more likely as investors lose their nerve ahead of the Federal Reserve meeting on Wednesday and Thursday, our time.

Another tightening of financial controls by the Chinese government has raised more questions about whether the government has a handle on its financial markets such as forex and equities.

As expected, the rising cost of pork pushed Chinese consumer price inflation higher to an annual rate of 2% in August, but the real story, as it has been for much of the past three years, was the tightening hold deflation has over Chinese industry.

As expected the Reserve Bank of NZ has again eased monetary policy by trimming its official cash rate 0.25% to 2.75%, the third successive cut by the bank this year.

So much for the strength of the rally we have seen on global markets in the past day or so.

Our market is heading for another solid day after yesterday’s 1.7%, 85 point surge, despite the weaker than expected trade data from China.

On the face of it the August trade data from China suggests the economy has had another bad month, raising further concerns about the impact of demand, growth and commodity producing economies like Australia.

The divergence between business conditions and confidence in the monthly surveys from the National Australia Bank showed up dramatically yesterday as confidence fell to a two year low last month, but conditions improved to their best since 2009.

China’s slowing demand for key commodities slowed noticeably in August, as volumes fell sharply in many cases.