Spreadex Market Update
Global Markets Navigate Turbulent Waters Amid Diverse Economic Signals
US labour market resilience, German inflation concerns, and UK growth signs weave a complex tapestry of global economic trends.
Key Factors for Today
- US labour market showing robustness ahead of Non-Farm Payrolls.
- Rising German inflation stirs doubts about European Central Bank's easing plans.
- UK's PMI and consumer data indicating growth amidst prevailing challenges.
- Fluctuations in WTI oil prices influenced by inventory changes and demand dynamics.
Market Movers
- US indices mark a continued decline amidst strong hiring and low jobless claims.
- The US dollar remains steady as 10-year Treasury yield faces resistance at 4%.
- Euro and Pound showing modest movements against the backdrop of regional economic updates.
- WTI Oil prices experience a downturn following a significant inventory build.
Economic Calendar
- German Retail Sales report.
- Halifax House Price Index release.
- UK's S&P Global Construction PMI update.
- Euro Area Inflation Rate announcement.
- Canadian Employment Change data.
- US Non-Farm Payrolls report.
- Ivey PMI figures.
- ISM Services PMI insights.
- Speech by Fed's Barkin.
The Big News
US Labour Market Data: A Mixed Bag of Signals
The US job market showed signs of strength with ADP's report of a significant hiring increase in December, notably in the services sector. This surge, marked by 164,000 new hires, comes at a time of decreasing jobless claims, suggesting a robust labour market. However, this optimism is tempered by financial traders who are reassessing their expectations for a Federal Reserve rate cut in March. Originally, there was a 70% expectation for the rate cut, but this has been scaled back to 65%. This change in perspective reflects the complex interplay between job market data and broader economic policy.
German Inflation and ECB's Dilemma
Inflation in Germany has become a point of concern, primarily driven by rising energy prices and the phasing out of subsidies. The inflation rate, recorded at 3.8%, is a significant increase that has not gone unnoticed. This situation is not unique to Germany, as similar patterns are observed in France. These developments cast doubt on the European Central Bank's (ECB) anticipated easing in March. The rising inflation in major Eurozone economies like Germany and France contributes to the already complex scenario of the Eurozone's economic health, which is already being questioned due to recession signals from various business activity indices.
UK's Glimmer of Economic Hope
The United Kingdom's economic situation shows a ray of hope amidst general stagnation. The final services Purchasing Managers' Index (PMI) for December exceeded initial estimates, suggesting some resilience in the services sector. Despite facing challenges like high wage-induced costs, firms have been responding by increasing prices. This reflects a certain degree of economic resilience under challenging circumstances. Alongside this, there has been a notable increase in British consumer borrowing, reaching a near seven-year high. This is an important development in the UK's economic narrative, adding complexity to the overall economic picture.
It's easy to open an account
- Fill in our simple online application form
- Fund your account
- Start trading the global markets instantly!
SEARCH FOR AN ARTICLE:
Enter a keyword and search for all relevant articlesMARKET ANALYSIS
RECENT POSTS
DISCLAIMER
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investors lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. For professional clients, spread betting and CFD trading can also result in losses larger than your initial stake or deposit.
Spreadex Ltd is authorised and regulated by the Financial Conduct Authority, provides an execution only service and does not provide advice in any way. Nothing within this update should be deemed to constitute the provision of investment advice, recommendations, any other professional advice in any way, or a record of our trading prices. This update does not constitute or form part of an offer of, or solicitation for a transaction in any financial instrument, nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract therefore. Any persons placing trades based on their interpretation of the comments or information within this update does so entirely at their own risk.
No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained within this update by Spreadex Ltd or any of its employees and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained within this update.
The information contained within this update is the intellectual property of Spreadex Ltd and is protected by UK and International copyright laws. All rights reserved. Users may however freely download, distribute and reproduce extracts of the contents, subject always to accrediting Spreadex Ltd as the source and providing a hyperlink to www.spreadex.com.
