US Inflation Outlook: Markets Weekly Forecast
The past week in the financial markets has been a whirlwind of activity, with key indicators pointing towards a December rate cut in the US. As markets eagerly await the US Jobs report, the likelihood of a 25 bps rate cut from the Federal Reserve in December stands at a staggering 80%.
US Equities Shine Bright
The Nasdaq index is on the cusp of reaching 22,000, showcasing the robust performance of US equities. Both the S&P 500 and the Nasdaq hit record highs, signaling a bullish trend in the market. Despite some struggles in the Dow due to a drop in UnitedHealth shares, the overall sentiment remains positive.
Global Market Anticipation
Investors worldwide are keeping a close eye on key events such as the US Consumer Price Index (CPI) data release and the European Central Bank (ECB) decision. Expectations are high for a 25 bps rate cut from the ECB, adding to the anticipation surrounding the US inflation data and the ECB’s monetary policy stance.
Week in Review: Jobs Data Impacts Rate Cut Decision
The US jobs report revealed a robust addition of 227,000 jobs, solidifying expectations of a December rate cut by the Fed. Despite a slight uptick in the unemployment rate to 4.2%, the stellar jobs print has set the stage for a rate cut next month.
Expert Insights and Market Analysis
Analysts predict that barring any unexpected inflation surprises, the Federal Reserve is likely to proceed with the anticipated rate cut in December. With policymakers entering a media blackout ahead of the upcoming policy meeting, all eyes are on the central bank’s decision-making process.
The ‘Santa Rally’ and Oil Market Dynamics
The ‘Santa rally’ seems to be in full swing, with the S&P 500 and Nasdaq eyeing further gains. However, oil prices faced challenges this week despite OPEC+ extending production cuts. Bank of America forecasts a surplus in oil supply, affecting price projections for Brent crude.
Gold’s Stability and Currency Trends
Gold prices remained rangebound, unaffected by Friday’s jobs data. The DXY experienced a mixed week, with major pairs showing choppy price action. The US Dollar’s performance in December will be closely monitored, especially in light of potential inflation upticks.
Looking Ahead: Asia Pacific and Developed Markets
In the Asia Pacific region, key economic data releases and events in China, Australia, and Japan will shape market trends. In developed markets like the US and Europe, focus shifts to CPI inflation data and central bank decisions amid speculations of rate cuts.
Chart of the Week: Nasdaq 100 Outlook
The Nasdaq 100’s impressive performance near the 22,000 handle has captured investors’ attention. With potential resistance levels at 21,750 and key support levels to consider, market participants are eyeing further upside potential in the index.
As market dynamics continue to evolve, staying informed and monitoring key indicators will be crucial for investors navigating the ever-changing financial landscape. Stay tuned for more updates and expert insights on global market trends.
