©Reuters
Written by Noreen Burke
Investing.com – Markets await Friday’s November jobs report hoping the data will support the Fed’s decision to moderate the pace of rate hikes. Markets will also closely follow Federal Reserve Chairman Jerome Powell’s speech mid-next week. The market is also awaiting inflation data for the Eurozone and PMI data from China in light of concerns over rising coronavirus infections. Here’s the most important thing to know to start the week.
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Employment relationship
Data from last week’s Fed minutes supported expectations of a moderation in Fed interest rate hikes. Next week’s jobs data could reinforce these expectations.
Economists expect it to add to the weakest increase since December 2020.
The ratio is also expected to moderate in , while it is expected to stabilize strongly at the highest rate of 3.7%, which is the lowest in 50 years.
This will be the last report before the last Fed meeting of the year in December.
However, investors are fearful of the more important report, because 5 out of 6 previous reports were stronger than expected, and with a strong reading, there could be concerns about US stock gains.
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Federal talks
The head of the Federal Reserve will discuss the economic outlook at the Brookings conference on Wednesday.
While Jerome Powell has indicated in the past that the Fed could move towards a lower-than-expected interest rate hike next month, he said the final interest rate next year will be higher than previously estimated by monetary policymakers.
While the market is waiting for a speech from , and , they will speak on Monday.
The market is also awaiting data and the Fed’s preferred measure of inflation, and will release both reports on Thursday.
It also announces data, the jobless claims report, and, from the Federal Reserve.
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Retail shares
Wall Street returns to trading after the Thanksgiving holiday and investors will focus on data from retailers and their performance during holiday shopping, which is one of the factors the Fed is basing its decision on.
The sales season took place in a context characterized by a severe blow due to high inflation and weak economic growth. Retailers have been offering steep discounts in both online and brick-and-mortar stores, which could impact margins in the fourth quarter.
Online shopping rose 2.3% to 9.12 billion on Black Friday, according to Adobe Analytics (NASDAQ: ) released on Saturday, but the percentage was still less than 7.7%.
Retail sales have become a measure of consumer confidence as inflation has risen. That’s why the retail sales index is down 30% this year, while the S&P 500 is down 15%.
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area hypertrophy
While the US is showing signs of easing, the inflation outlook for the Eurozone should be even better than expected.
The Eurozone index reached 10.6% last October, which is 5 times higher than the ECB’s 2% target.
The European Central Bank raised the interest rate by 75 basis points to 1.5% at its October meeting, bringing the rate to the 200 points raised since last July, which is the fastest pace of tightening ever.
Minutes of the European Central Bank’s October meeting showed members agreed to raise interest rates further to curb the rise in inflation, but no clear agreement on pace or final rate.
Markets are swinging between expectations of 50 and 75 points during the current period and the market awaits the interest rate decision from the European Central Bank on December 15th.
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PMI data for China
China is still facing a sharp rise in coronavirus infections and hopes that China will end its lockdowns have dwindled, leaving the world’s second-largest economy in a state of shutdown.
The market will be watching data for China on Wednesday as virus lockdowns continue to weigh on economic activity.
Officials have vowed to continue enforcing coronavirus restrictions despite popular unrest, which is squeezing the economy.
China said on Friday it had made the decision to reduce the amount of money banks have to hold for the second time this year, while increasing liquidity to push the economy higher.
Forecast and oil this week:
— This report contributed by Reuters
