Market Analytics and Considerations
Key Points
This morning, the December S&P 500 futures are rising steadily +0.14% after three major US indexes ended the normal session higher. Market players adopted an upbeat attitude ahead of critical data in focus
U.S. inflation data that many hope will persuade the Federal Reserve and other central banks to hold off on ad hoc interest rate hikes. Increases in the Oil & Gas, Utilities, and Technology sectors were principally responsible for the acceleration of three major U.S. stock indices.
The U.S.-Canada pipe line remains shut down.
In a few hours, the U.S. consumer inflation report will be the centre of attention. In comparison to the prior readings of +0.4% m/m and +7.7% y/y, economists anticipate that the November U.S. CPI will be +0.3% m/m and +7.3% y/y.
According to Rob Conzo, CEO and managing director of The Wealth Alliance in New York, “that is among the factors why the market is feeling a little bullish, because if you simply take the overall CPI, if it comes down towards another decrease from 7.7%, there is a noticeable trend here.”
Markets are also expected to pay attention to October’s U.S. Core CPI figures, which were +0.3% m/m and +6.3% y/y. According to analysts, the new figures will be +0.3% m/m as well as +6.1% y/y.
Nevertheless, the U.S. central bank’s monetary policy intentions are not anticipated to be altered by the further easing of inflation pressures. At this week’s monetary policy meeting, there is a 72.3% likelihood of a rate hike of 50 basis points and a 27.7% possibility of a rate increase of 75 basis points, according to U.S. rate futures.
United States 10-Year yields are at 3.604% in the bond markets, minus -0.20%.
Before the release of U.S. inflation statistics, investors are examining a variety of regional economic statistics, which has caused the Euro Stoxx 50 futures to decline this morning by -0.15%. The U.K. number of unemployed climbed by 30.5K in November, less than the forecasted 3.5K increase, while the jobless rate increased to 3.7% in October from 3.6% the month before as the job market began to feel the effects of the country’s consumer spending downturn.
Additionally, today saw the release of statistics on the U.K. Average Earnings Index +Bonus, U.K. Employment Change 3M/3M, Germany’s CPI, Italy’s Industrial Production, Germany’s ZEW Economic Sentiment, Germany’s ZEW Current Conditions, and Eurozone ZEW Economic Sentiment.
- The October Average Earnings Index +Bonus for the United Kingdom was published at 6.1%, below the forecasted 6.2%.
- UK employment change in October The 3M/3M result was 27K, exceeding forecasts of -17K.
- According to forecasts, the German November CPI came in at -0.5% m/m and +10.0% y/y.
- Italian industrial production for October came in at -1.0% m/m and -1.6% y/y, below forecasts of -0.4% m/m and -0.1% y/y.
- The December ZEW in Germany Economic Sentiment exceeded forecasts and registered at -23.3 instead of -26.4.
- German December ZEW Current Conditions came in weaker than expected at -61.4 as opposed to -57.0.
- Eurozone ZEW for December Economic Sentiment was -23.6, which was higher than forecasts of -25.7.
Today’s Asian stock markets ended in a diverse set. Japan’s Nikkei 225 Stock Index (NIK) closed up +0.40% while China’s Shanghai Composite Index (SHCOMP) ended -0.09%.
China’s Shanghai Composite today ended slightly down as concerns about the country’s mounting COVID-19 cases as a result of the government’s decision to scrap key components of its zero-COVID policy impacted on the prognosis for the second-largest economy in the world. The country’s strict zero-COVID policy is likely to have an influence on the economy, as seen by the investment in fixed assets, industrial output, and retail sales figures that China is planned to release later this week.
The shipbuilding, gas and water, and financial services sectors all saw increases today, helping Japan’s Nikkei 225 Stock Index finish stronger. The implied volatility of Nikkei 225 options is factored into the Nikkei Volatility, which increased by 4.10% to close at 18.78.
