Five Alive



A look at the day ahead in U.S. and global markets from Mike Dolan.

With a bit of a lag perhaps after Friday's strong jobs report, markets are realising the U.S. economy is not yet slowing as fast as they had assumed or the Federal Reserve may have wanted.

While dodging recession in 2023 should ostensibly be a good thing for most people, it raises uncomfortable inflation scenarios that question just how high Fed interest rates need to go and how long they stay there. And given that investors are overwhelmingly positioning for peak rates by mid year and Fed rate cuts after that, the 'good news is bad news' reactions re-emerged on Monday.

The latest trigger was surveys showing the U.S. service sector had regained steam in November, with employment there rebounding - much like the robust November payrolls report had indicated on Friday.

With next week's Fed meeting in view, the readout saw the S&P500 .SPX record its worst day in almost a month and the .VIX 'fear index' of Wall St volatility jumped back from 8-month lows. Futures markets pushed their implied Fed 'terminal rate' next May back above 5% - from as low as 4.85% shortly after Fed Chair Jerome's peculiarly dovish speech last week.

U.S. stock futures and equities in Europe and Asia were flat first thing on Tuesday. The dollar .DXY firmed up.

The nightmare scenario for some investors is that the Fed does indeed pause its rate rise campaign next Spring and the economy picks up pace - but inflation fails to return close to target and the central bank is forced to resume tightening later in the year, pushing recession onto 2024's radar too.

With Fed officials in their pre-meeting blackout period, each data point will now be very market sensitive. Tuesday's international trade soundings for October will be scanned for early indications of fourth-quarter GDP.

Even though some assume Europe is already in recession, the incoming German industrial numbers are showing it may be more shallow than many first feared - with its own implications for inflation and interest rates there.

European Central Bank 'doves' struck a more mixed tone this week - with ECB chief economist Philip Lane saying inflation is close to a peak even if more rate rises are needed. Ireland's central bank chief Gabriel Makhlouf reinforced market pricing for downshift in ECB rate rises to a 50 basis point hike next week, but also said rates may need to exceed current terminal rate assumptions of 3%.

Australia's central bank was similarly unaccommodating on Tuesday as it raised interest rates to a 10-year high of 3.1% and stuck with its projection that more hikes are needed to cool inflation - to some surprise in markets.

There was much better news from crude oil markets, where Brent skidded further to below $82.50 as the Russian oil price cap and sanctions came into effect - with the fall from Monday's peak close to 7%. The year-on-year oil price gain, which was almost 100% in April, has retreated back toward 10%.

There were further signs that China's COVID restrictions are being lifted gradually - though that's ambiguous for global inflation outlooks more generally.

There will also be attention later on the U.S. Senate runoff in Georgia - although Democrats have control of the Senate regardless.

In technology, Facebook parent Meta Platforms on Monday threatened to remove news from its platform if the U.S. Congress passes a proposal aimed at making it easier for news organizations to negotiate collectively with companies like Alphabet, Google and Facebook.

Key developments that may provide direction to U.S. markets later on Tuesday:

* US Oct international trade balance, Canada Oct trade balance * U.S. corporate earnings: Autozone, Toll Brothers, MongoDB * ECOFIN of EU finance ministers meet in Brussels * Results from U.S. Senate runoff in Georgia



Surprises still positive Link
RBA continues with moderate rate hikes Link
Fed missing the mark Link



By Mike Dolan, editing by Alexandra Hudson,
mike.dolan@thomsonreuters.com. Twitter: @reutersMikeD

إخلاء المسؤولية: تتيح كيانات XM Group خدمة تنفيذية فقط والدخول إلى منصة تداولنا عبر الإنترنت، مما يسمح للشخص بمشاهدة و/أو استخدام المحتوى المتاح على موقع الويب أو عن طريقه، وهذا المحتوى لا يراد به التغيير أو التوسع عن ذلك. يخضع هذا الدخول والاستخدام دائماً لما يلي: (1) الشروط والأحكام؛ (2) تحذيرات المخاطر؛ (3) إخلاء المسؤولية الكامل. لذلك يُقدم هذا المحتوى على أنه ليس أكثر من معلومات عامة. تحديداً، يرجى الانتباه إلى أن المحتوى المتاح على منصة تداولنا عبر الإنترنت ليس طلباً أو عرضاً لدخول أي معاملات في الأسواق المالية. التداول في أي سوق مالي به مخاطرة عالية برأس مالك.

جميع المواد المنشورة على منصة تداولنا مخصصة للأغراض التعليمية/المعلوماتية فقط ولا تحتوي - ولا ينبغي اعتبار أنها تحتوي - على نصائح أو توصيات مالية أو ضريبية أو تجارية، أو سجلاً لأسعار تداولنا، أو عرضاً أو طلباً لأي معاملة في أي صكوك مالية أو عروض ترويجية مالية لا داعي لها.

أي محتوى تابع للغير بالإضافة إلى المحتوى الذي أعدته XM، مثل الآراء، والأخبار، والأبحاث، والتحليلات والأسعار وغيرها من المعلومات أو روابط مواقع تابعة للغير وواردة في هذا الموقع تُقدم لك "كما هي"، كتعليق عام على السوق ولا تعتبر نصيحة استثمارية. يجب ألا يُفسر أي محتوى على أنه بحث استثماري، وأن تلاحظ وتقبل أن المحتوى غير مُعدٍ وفقاً للمتطلبات القانونية المصممة لتعزيز استقلالية البحث الاستثماري، وبالتالي، فهو بمثابة تواصل تسويقي بموجب القوانين واللوائح ذات الصلة. فضلاً تأكد من أنك قد قرأت وفهمت الإخطار بالبحوث الاستثمارية غير المستقلة والتحذير من مخاطر المعلومات السابقة، والذي يمكنك الاطلاع عليه هنا.

نحن نستخدم ملفات الكوكيز لنمنحك أفضل تجربة على موقعنا. يمكنك قراءة المزيد أو تغيير إعدادات الكوكيز.

تحذير المخاطر: رأس مالك في خطر. المنتجات التي تستخدم الرافعة قد لا تكون مناسبة للجميع. يرجى الاطلاع على تنبيه المخاطر.