Key Global Events
Stock exchanges down slightly, Milan -0.05%, Paris' Cac40 -0.03% and London's Ftse100 -0.18%, only Frankfurt's Dax remains above parity.
Investors fear that better-than-expected US services data will prompt the Fed to hike interest rates for a longer period. And it is no coincidence that the Vix, the volatility index, jumped by almost 9% on Monday.
ECB chief economist Philip Lane said inflation will drop significantly in 2023 while the recession is expected to be short-lived.
On rates, Lane continues, the ECB has already done a lot and will also consider what the other central banks will do, while the reduction of the balance sheet (Quantitative Tightening) according to Lane should be a two-phase process.
Forex & Commodities
Gold travels sideways at 1,782 dollars per ounce, American WTI oil gains 0.45% to 77.28 dollars a barrel. The yen dropped 0.3% to 137.19, while the euro settled at 1.0489 and the pound at 1.2188.
The Reserve Bank of Australia raised borrowing costs by 25 basis points to 3.1% at its 2022 final meeting, in line with market expectations. The move marked the eighth consecutive rate hike, taking borrowing costs to a level not seen since November 2012, with the board signaling further hikes ahead as inflation in Australia is deemed too high, AUDUSD to 0.6717 (+0.34%).
Weak EURUSD at 1.0485 (-0.04%) and GBPUSD at 1.2174 (-0.09%).
The Japanese yen depreciates while the 1uuro continues to rise, now above 1.0560 against the dollar.
The pound at 1.2265 is trading slightly below parity while the USDJPY is up one percentage point to 135.64.
Index – After the bad closure of Wall Street, the Asian stock markets travel in the red on Tuesday 6 December. The Nikkei climbs 0.24%, the Hang Seng loses 1.23%, Shanghai is down 0.17%.
Wall Street futures, after yesterday's bad closing (S&P500 -1.79%) are traveling in positive territory (+0.235 for the S&P500 and +0.27% for the Nasdaq).
Key Macroeconomic Data
Futures point to a softer open on Wall Street after a strong week.
EU – Orders to factories in Germany for the month of October rose by 0.8% (expected 0.1%).
US – Balance of trade balance (2.30pm). And EIA forecast on energy.