The week ahead promises significant market movements, particularly with the Federal Reserve’s meeting on Wednesday. The market consensus is that a quarter-point rate cut is imminent, but the guidance from Chair Powell and the FOMC dot plots will be closely watched.
In China, data showed weaker-than-expected retail sales and house prices continued to fall, sparking concerns about the government’s economic stimulus efforts. However, industrial output held up, and bond yields hit a record low in reaction. The yuan suffered its biggest weekly drop since 2018.
South Korea’s politics is steadier after Han Duck-soo took over as interim president, while authorities vowed to stabilize financial markets. The KOSPI index remained steady on Monday.
The global economy is closely watching the Fed meeting, with market expectations pointing to three rate cuts next year, rather than four. The terminal interest rate could rise to 3.0% or more. Markets are hawkish, suggesting a floor for rates around 3.80%, which contributed to the decline in bonds last week.
Other central bank meetings include the Bank of Japan and Norges Bank, seen as being on hold. The Riksbank is expected to cut rates by 50 basis points. Additionally, bitcoin surged above $106,000 after US President-elect Donald Trump floated a plan for a U.S. bitcoin strategic reserve.
Key events that could influence markets this week include appearances by ECB officials, PMIs for Europe and the US, Bank of Canada Governor Tiff Macklem’s speech, and the Empire State Manufacturing Survey for December.
Source: https://finance.yahoo.com/news/morning-bid-chinese-consumers-shut-053135798.html