Market earthquake? 6 reasons to fear instability

Market instability and volatility ahead, with at least 6 factors being carefully watched by investors.
From the incoming economic data, primarily those on inflation, to the geopolitical dynamics, with the two ongoing wars obscuring global forecasts for the near future, the financial markets are prey to pitfalls and uncertainties.
The boom in Nvidia and enthusiasm for Artificial Intelligence, combined with central banks' hesitations on rate cuts and fluctuations in the dollar and oil prices, are driving the markets.
What's about to happen? A look at 6 events to absolutely monitor.
1.
Where is US inflation going? US inflation is about to return to the spotlight, with the personal consumption expenditure (PCE) price index set to offer investors new clues about an economy that has been stronger than many expected.
Recent data such as consumer prices, producer prices and employment show that the world's largest economy continues to prosper despite months of high interest rates.
In this context, the Fed appeared increasingly cautious and rejected expectations of an imminent rate cut.
Bond yields rebounded and the dollar rose.
Economists polled by Reuters forecast a 0.3% increase for January after 0.2% the previous month.
A stronger-than-expected PCE result could further weaken market rate cut bets.
2.
Dollar, the race is over? The dollar's 2024 bull run marked its first weekly setback after global growth and risk appetite received a boost from blockbuster earnings from Nvidia Corp.
The Bloomberg greenback indicator slipped by 0.1% since last Friday, after rallying for seven consecutive weeks in an advance of 2.6% through February 16.
Treasury bond yields at year-to-date highs failed to ignite demand for the U.S.
currency, while the ICE dollar index also fell 0.3% this week, its worst performance in two months.
Most G10 currencies advanced.
Data suggesting a soft landing for the US economy and better-than-expected growth prospects in Europe dented the attractiveness of traditional safe-haven currencies, weakening the dollar, franc and yen.
Demand for riskier assets further weighed on currencies, as US, European and Japanese stock indicators hit all-time highs, boosted by an Nvidia-fueled rally that saw the stock surpass a $2 trillion valuation.
3.
Inflation falling in the Eurozone, but by how much? The next flash inflation data for February, released on March 1, is expected to show that euro area prices, which rose by double digits in 2022, are moving back towards the 2% target.
It fell to 2.8% in January from 2.9% in December and is cooling rapidly with weak growth and falling energy prices.
read also Germany increasingly "sick of Europe".
Industry worsens, data The composite reading will follow national data from Germany, France and Spain, all presented ahead of the ECB meeting on 7 March.
Vice President Luis de Guindos said meanwhile that time and more data are needed before politicians can confidently say that record-high rates can fall.
Wage growth has slowed in the meantime, but remains above levels consistent with 2% inflation.
The next ECB decision therefore appears complicated.
It will not be easy to maintain the right balance between keeping rates high enough to contain inflation and timing a first cut right.
4.
China and Japan, what growth? Policymakers in China and Japan are facing an uphill battle to improve their economies' bleak growth prospects.
Japan's inflation data will be released next Tuesday and expectations that consumer prices have cooled again in January may give the Bank of Japan (BOJ) less reason to exit negative rates this year.
The central bank faces a recessionary environment and sluggish consumer spending, but maintaining ultra-expansionary policy would mean more pain for the yen.
In China, authorities are increasingly busy trying to shore up a fragile economic recovery after making the biggest-ever cut in the benchmark mortgage rate and stepping up regulatory pressure to revive a loss-making stock market.
Friday's PMI data will provide more clarity on the effectiveness of Beijing's support measures.
5.
The future of global trade Growing protectionism and geopolitical conflicts have cast a shadow over world trade, which grew just 0.2% last year, the weakest rate in fifty years outside of global recessions .
In this context of uncertainty, the World Trade Organization will meet at ministerial level in Abu Dhabi on Monday.
The body is hampered by disputes between member countries and above all by internal politics that have exacerbated free trade, for which the WTO was established.
read also Climate change and economic disaster in 3 issues Ahead of the US elections in November, there is little chance that Washington will lift the block on new appointments to the WTO's highest appellate body, which means its dispute arbitration body commercial will remain inactive.
Meanwhile, the prospects for agreements in important sectors, such as agriculture and fisheries, remain weak, which means weakening the entire global economy for the foreseeable future.
6.
War in Ukraine, already two years old We are on the second anniversary of the Russian invasion of Ukraine, a conflict that has shaken and shaped not only the country itself, but also global politics, raw materials markets and economies as no one else in recent history.
read also Russian gas will continue to flow into Europe for a long time, here's why Prices of energy and many raw materials have returned below pre-war levels, although gold – a hedge against inflation – is higher than prices of February 2022.
Outgunned, outnumbered and with growing concerns about the prospect of international aid, Ukraine is under growing pressure.
The International Monetary Fund warns that “timely support” to Ukraine from the United States and other international donors is needed to ensure the country's fiscal sustainability.
Meanwhile, Russia, already barred from the global financial system under a series of sanctions, is facing new curbs from Washington, Britain and others following the death of opposition leader Alexei Navalny.