Briefly about what is happening in World-part 2
2022.12.09 03:49
Briefly about what is happening in World-part 2
Budrigannews.com – The most important central banks in the world will be on the agenda next week, and there are a lot of signs that the fast rate hikes might slow down, but price pressures won’t stop them just yet.
As Beijing loosens some of its strict COVID-19 shackles, China publishes important economic data, and PMIs will provide a health check for the global economy.
From Lewis Krauskopf in New York, Kevin Buckland in Tokyo, Dhara Ranasinghe in London, Naomi Rovnick, and Amanda Cooper, here is a look ahead to the week in markets.
1/TWICE THE FUN
Investors will receive a substantial dose of year-end U.S. news on Tuesday with the release of data on consumer inflation for November, followed on Wednesday by the Federal Reserve’s final rate decision for 2022.
Prices increased by 0.4% from the previous month, which was lower than anticipated, according to the CPI report released in October. Signs of slowing inflation boosted equities and hurt the dollar. The reading for November is expected to be 0.3%. However, concerns about inflation were rekindled by recent robust employment data in the United States.
Proceed to the Federal Reserve, where Chair Jerome Powell will hold his final press conference of the year following recent remarks that it was time to slow the pace of the upcoming rate increases. A 50-bps increase is being anticipated by traders, which is a decrease from the recent three-quarter percentage point increases. Instead, signals regarding how much the Fed will ultimately raise rates next year may be the focus.
Focus on inflation and fed
2/Super Thursday
Central banks from the euro area, Britain, Switzerland, and Norway meet on Super Thursday.
Markets are confident that the European Central Bank (ECB) will make a 50 bps rate change on Dec. 15, following two consecutive 75 bps rate increases. These latest inflation numbers have raised hopes that pressures in the euro zone are finally decreasing.
More Questions that ECB should answer
Pipeline price pressures remain strong, and President Christine Lagarde will be careful not to give the impression that policymakers are taking their eyes off the ball, so don’t expect the ECB to sound dovish.
It’s a similar story somewhere else, with Switzerland and Norway likewise expected to lift getting costs once more. The speed of forceful rate climbs from large national banks is easing back however the battle against expansion isn’t finished at this point.
The Bank of England will likely raise borrowing costs once more on Thursday due to the grim economic situation in Britain.
Race to raise rates
3/ Hiking into a recession
Reuters polled economists and found that despite the BoE’s prediction of a recession that will last well into 2024, the central bank will raise its key rate by 0.5 percentage points to 3.5%.
In the year to October, consumer price inflation reached a 41-year high of 11.1% due to rising costs for energy and food. The BoE is likely to delay ending monetary tightening while inflation remains well above its 2% target, as evidenced by trends in the eurozone and the United States. However, Wednesday’s UK inflation data may suggest that price increases have peaked. Swaps markets predict that UK interest rates will reach 4.6 percent by September and remain at 4.5 percent until 2023.
4/CHINA LOOSES COVID COLLAR
After three years of suffocating coronavirus curbs, China can finally breathe a little easier. The Bank of England’s fight against rampant inflation Just in time for a trip to Shanghai’s newly opened Disneyland, the new measures include no more testing for domestic travel and home quarantine for COVID-positive individuals instead of isolation centers.
Residents, who a week ago were protesting in the streets, are now celebrating on social media with the long-awaited shift on Wednesday. Investors are calmer. That day, after a multiweek rally, the had its worst day in more than a month. The yuan is back on the more grounded side of the key 7 for every dollar mark, yet topped on Monday.
The effects of COVID lockdowns as well as weaker international demand were highlighted by the weakest trade data in two and a half years, raising concerns. Thursday’s retail and factory data could lead to more negative reading.
5/SLOW-HO-HO DOWN
The worst inflation in a generation is coming to an end in China’s economy. Businesses and households are experiencing some respite from eye-wateringly high inflationary pressures now that energy prices are well below the year’s highs.
However, it is highly unlikely that this will be sufficient to prevent a sixth consecutive month of contraction in business activity in December across some of the largest economies in the world. From manufacturing to hospitality, demand has decreased and input costs have increased.
S&P Worldwide (NYSE:) It is anticipated that the flash composite PMI output indices for the United States, Great Britain, Germany, France, and the entire euro zone will show some slight improvement; however, activity is anticipated to have decreased once more in each of the five regions. Japan is also on the agenda due to its manufacturing PMI’s sharpest contraction in two years in November.
