Commodities NewsCryptocurrencies NewsFinancial NewsNewsStock Market News

Week Ahead: The FED, ECB , UK Elections, Chinese Data

Week Ahead: The FED, ECB , UK Elections, Chinese Data

Asia Opening:

Asian stocks kicked off the week in a muted fashion ahead of key central bank meetings and a looming U.S.-China tariff deadline. Treasuries stabilized after declines Friday.

Equity benchmarks were higher in Tokyo, Sydney and Seoul. Gains fizzled in Hong Kong and Shanghai as S&P 500 futures slipped. Investors are awaiting news on whether the U.S. will go ahead with a planned Dec. 15 tariff hike on Chinese imports. Weekend data showing a drop in Chinese exports underlined the stakes for growth. The S&P 500 logged gains Friday, when reports showed payrolls jumped the most since January, wages beat estimates and consumer sentiment increased. Treasury yields were steady after climbing above 1.80%.

Stocks were whipsawed last week on conflicting signs on progress in trade negotiations between the world’s two-largest economies. White House economic adviser Larry Kudlow said Friday the two sides are haggling over the amount of U.S. farm products Beijing is willing to purchase. Meantime, China’s exports fell 1.1% in November, with those to the U.S. tumbling 23%, underscoring why the nation may want a trade deal.

“There’s no upside risks on the horizon,” Katrina Ell, an economist at Moody’s Analytics, said on Bloomberg TV. “It is weighted to the downside and that big downside risk is coming from the trade war.”

Also in focus for investors are central banks, with policy meetings at the Federal Reserve and the European Central Bank this week, which may offer clues on whether more monetary easing is in store in 2020.

Elsewhere, oil trimmed a rally spurred by Saudi Arabia promising significant additional production cuts beyond what was agreed with fellow OPEC+ members.

Highlights this week:

Market attention next week will be focused on global monetary policy and the UK general election. Here’s what to watch in the coming days.

Federal Reserve decision

The Federal Reserve is widely expected to sit pat when it delivers its monetary policy decision next week bringing an end to the mid-cycle policy adjustment that began over the summer. Policymakers at the central bank have more room to breathe following the blockbuster November non-farm payroll report, which suggested the US labour market and economy are on a firm footing even as the Washington and Beijing remain engaged in a trade war.

Wednesday’s decision will be accompanied by updates to the central bank’s growth and inflation forecasts, the so-called dot plot of interest rate projections and a press conference with chair Jay Powell.

“With financial conditions in ‘easy’ terrain and largely unchanged since the October meeting and a phase one trade deal still seemingly on the table, the Fed is unlikely to make any substantive changes to the forward-looking language in the statement,” strategists at RBC said.

Investors will also closely watch inflation and retail sales figures that will be published this week for a clearer snapshot of economic growth in the final quarter of the year.

European Central Bank

The ECB delivers its interest rate decision on Thursday and expectations are the bank will not make any changes to policy having pushed

through measures at the September meeting. Instead, the focus will be on Christine Lagarde at her first governing council meeting.

“What she has to say will be closely watched for indications as to whether she represents continuity from the Draghi era as most market participants have assumed.,” strategists at RBC Capital Markets said.

UK election

Voters head to the ballot box on Thursday for the UK general election. With less than a week to go, polls show Boris Johnson’s Conservative Party leading Labour, however, analysts point out there is still a possibility for another hung parliament. “Given the Conservatives’ lack of potential partner parties in Westminster, this scenario could feasibly see Labour form a minority government,” write analysts at ING.

A Conservative majority would take the UK out of the EU at the end of January while a hung parliament could further delay Brexit and possibly result in a second referendum.

Sterling has risen to a seven-month high against the US dollar with polls signalling a lead for the Tories. Economists at Pantheon Macroeconomics caution “further upside for the sterling from here, in the event that the Conservatives win a majority, looks modest”.



Subscribe to our premium packages if you would like to get 1000+ instruments analysis and trade signals of Chartreadreadepro.


Discord Channel

You can contact us via Skype User Name: Chartreaderpro

DISCLAIMER: This is a technical analysis study, not advice or recommendation to invest money

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility

Show More

Related Articles

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.