Calm after — or before — the storm -Breaking
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Sujata Rao gives a glimpse at what lies ahead.
While central banks are able to stop the most aggressive rate increases, U.S. employment data has shown that it is strong and that a U.S. infrastructure bill worth $1 trillion has been approved.
Tendency yields for short-term Treasury are now down by 15 basis points compared to highs reached last week. Chinese October export data beat forecasts.
Even with this background, the world stock market is struggling to move forward after reaching new highs. Wall Street futures are currently in red.
This could be a temporary reprieve, and the U.S. Federal Reserve will soon get hawkish. October payrolls showed hefty job increases as well rising hourly wage. Today’s Fed speakers include Vice-Chair Richard Clarida.
Recent central bank-linked volatility is also putting more emphasis on economic data. Wednesday’s U.S. Inflation figure will be the centerpiece, forecasting a further acceleration in price growth — following Tuesday’s ZEW indicator.
Today, the excitement continues to build (yet another!) Tesla (NASDAQ:), after Elon Musk’s followers on Twitter (NYSE:) voted for him to sell 10% of his shares. Frankfurt-listed stocks are now down 9.9%, possibly due to speculation.
Last but not least, China’s regulatory crackdowns continue to impact. SoftBank Vision’s Vision fund suffered a $10B loss. This was due to the company’s Chinese tech holdings. The largest of these assets is its ecommerce business. Alibaba In the first quarter of 2012, for example (NYSE:), it lost 33% of its value
Later today, infrastructure-linked shares could get a fillip from the passage of the U.S. bill, with oil already up 1%. As of today, non-U.S. citizens who have been vaccinated can travel to the United States freely — possibly setting up a boom for jet fuel and airlines.
These are the key developments which should give more direction to the markets Monday
China Oct Exports Beats Forecasts. Offers a buffer against slowing economy
According to sources, Evergrande unit investors may not have received the Nov 6 bond interest.
-UK appears to be ready for emergency measures regarding NIreland Trade
Temporary increase in inflation of the eurozone
Fed Speakers: Philadelphia President Patrick Harker and Chicago President Charles Evans. Boston Interim President Kenneth Montgomery. Vice Chair Richard Clarida
– Euro zone finance ministers meet
– US 3-year note auction
(For graphic on Inflation on the rise – https://fingfx.thomsonreuters.com/gfx/mkt/klpykdeakpg/Pasted%20image%201635972322848.png)
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