Today all investors’ attention is focused on non-farm payrolls data in the US and the inflation rate in Eurozone

by JustForex

The US stock market ended Thursday’s trading with a decline amid negative dynamics from the utilities and healthcare sectors. By the close of the trading day, the Dow Jones Industrial Average (US30) decreased by 0.47%, the S&P 500 (US500) fell by 0.10%, and the NASDAQ Composite (US100) lost 0.13%.

The number of new jobless claims in the US was 207,000, while analysts expected 194,500. But the market participants are still confident in the economic recovery, especially in the labor market, and expect the monthly job gains in December to recover after the weak November data. Economists are predicting that the US economy will create 400,000 jobs in December. The good data may further strengthen the dollar index ahead of an interest rate hike.

Bank of America raised its target for Tesla to $1,300 a share.

European stock indices closed yesterday in the red zone. By the end of the day, German DAX (DE30) lost 1.35%, French CAC 40 (FR40) decreased by 1.72%, British FTSE 100 (UK100) fell by 0.88%, and Spanish IBEX 35 fell by 0.90%.

German inflation accelerated to 5.3% in December. The last time German inflation was 5.3%, the Bundesbank’s key interest rate was 8.6%. Today, the ECB’s key rate remains at 0%. Analysts expect the ECB to raise interest rates by 10-15 basis points in October-December 2022.

In November, German industrial production fell unexpectedly, indicating that the recovery in the manufacturing sector is weakening. On an annualized basis, German industrial production fell to 2.4%.

Eurozone inflation data will be released today. Economists are predicting that inflation will remain the same or even decrease slightly.

Oil prices have exceeded $80 per barrel on unrest in Kazakhstan and supply disruptions in Libya. Still, analysts are confident the price could exhaust itself soon as the Omicron strain continues to threaten demand at a time when supply should increase in the first quarter because of the release of strategic reserves.

Yesterday, gold decreased by 2% and broke down support at $1,800 an ounce. News of a rate hike is almost always negative for gold, which was reflected to some extent last year when gold ended 2021 down 3.6%, its first annual decline in three years and the biggest drop since 2015. But some analysts believe that if US inflation continues to rise through 2022, gold could rise again and even update the price highs of $2,100, which, by the way, happened against the background of concerns about the sharp rise in price pressure.

Asian stock indices closed lower yesterday. Japan’s Nikkei 225 Index (JP225) decreased by 2.9%, Australia’s ASX 200 Index (AU200) lost 2.7%, the exception was Hong Kong’s Hang Seng (HK50), which gained 0.7%.

The benchmark consumer price index (CPI) in Japan’s capital, which includes oil prices but excludes food prices, increased by 0.5% in December from a year earlier, the biggest year-over-year increase since February 2020. Meanwhile, inflation-adjusted wages fell 1.6% in annual terms, declining for the third month straight. Such data does not foresee a stronger economic recovery.

Main market quotes:

S&P 500 (F) (US500) 4,696.05 −4.53 (−0.096%)

Dow Jones (US30) 36,236.47 −170.64 (−0.47%)

DAX (DE40) 16,052.03 −219.72 (−1.35%)

FTSE 100 (UK100) 7,450.37 −66.50 (−0.88%)

USD Index 96.23 +0.06 (+0.06%)

• – Japan Tokyo Core CPI (m/m) at 01:30 (GMT+2);
• – Switzerland Unemployment Rate (m/m) at 08:45 (GMT+2);
• – German Industrial Production (m/m) at 09:00 (GMT+2);
• – Switzerland Retail Sales (m/m) at 09:30 (GMT+2);
• – UK Construction PMI (m/m) at 11:30 (GMT+2);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+2);
• – Eurozone Retail Sales (m/m) at 12:00 (GMT+2);
• – US Nonfarm Payrolls (m/m) at 15:30 (GMT+2);
• – US Unemployment Rate (m/m) at 15:30 (GMT+2);
• – Canada Unemployment Rate (m/m) at 15:30 (GMT+2);
• – Canada Ivey PMI (m/m) at 17:00 (GMT+2).

by JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.