Europa (UE)

4 themes not to be missed to start the day on the markets

The market day is focused on at least 4 key themes to orient investors in such a complex financial and economic context.
The European calendar is rather bare of data, but not the US calendar from which new data on non-agricultural payrolls and the unemployment rate are expected.
These results are highly anticipated and will give interesting indications on the state of health of the world's largest power, especially in view of the Fed meeting on December 13th.
However, the EU remains in the spotlight with the Ecofin meeting of the finance ministers of the 27 states.
The meeting promises to be difficult but historic, as it will have to reach an agreement on the new rules of the Stability Pact.
Investors' attention on this trading day is also high on expectations on bonds, interest rates and movements in the yen, with 4 key themes.
read also US recession in 2024? What can happen in markets 1.
New bets on the Bank of Japan The yen rally has extended, with traders betting on a more aggressive Bank of Japan, ready to abolish the world's last negative interest rate regime much sooner than previously thought.
In Asian trade, the currency appreciated 1.1% against the dollar, after briefly jumping nearly 4% during the New York session.
On Thursday 7 December, governor Kazuo Ueda declared that an "even more challenging" year lies ahead and his expression was interpreted by traders as a sign of an imminent change in monetary policy.
The consequences of above-zero rates in Japan, and in particular the possibility of the BOJ hiking while the rest of the world cuts the cost of money, could be enormous as it could trigger an unwinding of carry trades and a reorganization of capital flow Japanese.
The next BOJ meeting is scheduled for December 19.
The ECB, Bank of England and Fed will meet before then, with markets expecting rates to remain unchanged.
2.
No deal in Europe European Union finance ministers are still seeking agreement on new tax rules.
During the night talks there was progress towards finding a shared solution on the Stability Pact, but some points are still unresolved.
The meeting scheduled for today, Friday, December 8, will not see deeper discussions, the people said, adding that work is expected to continue in the coming days.
The crux is an agreement on the gradual elimination of debt, with the most indebted countries – including Italy but not only – asking for greater flexibility compared to the old rules.
3.
Watch U.S.
data The bond traders who fueled the rally in the $26 trillion U.S.
Treasury market are about to find out their investing hunches are right.
Softening inflation and jobs data over the past month has convinced investors that the Federal Reserve is done raising interest rates and fueled bets on cuts of at least 1.25 percentage points over the next 12 months.
In the mix of data arriving on Friday 8 December – 2.30 pm Italian time – a key report on the US labor market will be revealed which will offer indications on how much the economy is really cooling.
read also Saving or investing? The investors' dilemma explained by experts 4.
How to invest? Some Warnings According to Marko Kolanovic, chief market strategist at JPMorgan, US stock investors will find themselves in a loss-making situation next year.
The expert warned clients that stocks and other risky assets will not be able to sustain any potential rally without substantial interest rate cuts by central banks (and he does not expect this unless markets fall sharply).
obvious or the economy does not stall).
For this reason, Kolanovic said investors should opt for cash or bonds over stocks.

Author: A.W.M.

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