Peter Nurse  

Investing.com — Putin and Biden are set to discuss Ukraine, while ECB’s members debate inflationary pressures. Stock markets look set to close the year with a rise like the U.K. housing sector, while crude awaits for OPEC’s output level discussions. This is what you should know about financial markets Thursday 30th December.

1. Putin and Biden will hold talks

In the midst of growing tensions about eastern Ukraine’s situation, U.S. President Joe Biden is scheduled to meet with Russian President Vladimir Putin on Thursday.

Russia’s intentions towards Ukraine have concerned the West ever since its seizure of Ukraine’s Crimea peninsula in 2014. This situation has been made more serious by the U.S. accusing Moscow that it plotted to invade Ukraine. They also pointed out the recent massing of hundreds of thousands of troops close to the Ukraine border over the last two months.

Russia denies any intention to attack Ukraine and claims it is free to deploy its troops wherever it wants. 

That said, Moscow has expressed concern about NATO expanding eastwards, and has been seeking guarantees that Ukraine or other neighboring countries will not be allowed to join the Western military alliance or house NATO’s advanced weaponry.

Calls will be made at 3:30 PM. ET (2030 GMT), according to the White House. 

2. Stocks set to rise; Focus on jobless claims

U.S. stocks will open slightly higher on Thursday due to positive Omicron vaccine news before the publication of U.S. labor markets data.

At 5:20 AM ET the points were up 20 percent or 0.1%. The 0.1% were five points higher than 0.1% while 0.2% was slightly up 40.

All three major averages will close 2018 on a positive note. This is due to the optimism that coronavirus-related restrictions and curbs may not be necessary into 2022. The Omicron variant, while still being a highly dangerous variant, has been deemed less harmful than the other variants.

Helping the tone Thursday was the news that a booster dose of Johnson & Johnson (NYSE:)’s single-dose Covid-19 vaccine was 84% effective at preventing hospitalization in South African healthcare workers who became infected with the Omicron variant, according to a study published earlier Thursday.

Micron (NASDAQ) will also be in the spotlight on Thursday, following the strict Covid-19 restrictions by memory chip manufacturers in China’s Xian. This could cause disruption to its local chip production base.

The main economic release is the weekly number, at 8:30 AM ET (1330 GMT), which is expected to be largely unchanged from the previous week’s 205,000, a level that is generally consistent with pre-pandemic levels.

3. ECB’s inflation hawks and doves

Although the government may have decided inflation was too high to ignore, the ongoing debate about rising prices in the is not.

The ECB increased its inflation projections earlier in the month to over 2% for 2022 and this year, while forecasting that inflation would fall below that level in the two following years.

However, ECB governing council member Klaas Knot said in an interview Thursday that inflation in the euro zone could very well exceed these current projections for the coming years, saying that the central bank’s outlook could prove to be too rosy.

“I hold a different opinion, and I believe the chances we stay above 2% are just as high.” Knot said that Knot was not far from 2% but still.

Ignazio Visco of the ECB Governing Council countered this view on Thursday, stating that forecasts for Eurozone inflation below 2% by 2023 and 2024 were exposed to upside risk as well.

This internal dispute between hawks, doves in the ECB will likely last some time and can get heated.

4. The U.K.’s housing market is on the rise

The U.K. economy has not been much to report on, except for the buoyant housing sector.

Britain’s economy experienced its biggest annual decline in 300 years in 2020 amid the fallout from the coronavirus pandemic, and the rebound has been gradual with Brexit remaining a drag on growth.

That said, rose by a stronger-than-expected 1.0% in December from November, capping the biggest full-year rise in prices since 2006, according to data from mortgage lender Nationwide Thursday.

This month’s house prices were 10.4% more than December 2020. It was due to a no-longer available tax credit for buyers, and the ongoing demand for larger properties because of increased home ownership.

5. Crude has a record year

Oil prices weakened Thursday, handing back some of the previous session’s gains after U.S. inventories data showed continued demand from the world’s largest consumer despite rising numbers of Covid cases.

Futures had fallen 0.9% to $75.91 per barrel by 5:20 am ET and 0.9% to $78.54 per barrel at the same time.

According to the Energy Information Administration data, crude oil in America fell by 3.6 Million barrels during the week ending Dec. 24, roughly the same as what was reported Tuesday. 

Also, inventories of gasoline and distillate also dropped. This indicates that demand is still strong in spite record Covid-19 numbers in the United States.

Crude oil is poised to see gains between 50%-60% in 2021, as the demand for crude has returned to pre-pandemic levels. Top producers however have taken a cautious approach to returning their output to market.

Next week will see the Organization of Petroleum Exporting Countries meet with its allies, including Russia. This group is known as OPEC+.