ETX Capital Daily Market Bite, 17th December 2013: European Markets Weak Before Fed Meeting
December 17, 2013 9:44 am
December 17th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist.
European markets have opened lower today, as investors avoided taking strong bets ahead of a policy meeting at which the US Federal Reserve would decide the timing of possible reduction in its stimulus measures. Closer home, investors eye UK November inflation data, to gauge the market direction. Trepidation across other asset classes too with the risk tone eroding somewhat into the European session.
Strong industrial production data out of the US yesterday kicked up Wall Street and Asian share markets overnight but in Europe, but European investors are now looking to the plethora of risk-events before adjusting appetite for risk. Out of the UK, we have consumer price inflation and PPI data due soon while in the euro zone, we also have inflation figures and the German ZEW survey. Inflation data out of the US will be eyed too as the Fed is likely to hint at inflation being below target in the US — we also have the US NAHB housing market report.
Onto the Fed, expectations of tapering continue to underpin price-action but most market participants believe the Fed will wait until early next year before starting the process as the US economy needs to shower greater momentum. Labour market indicators in recent weeks have been stronger, fuelling expectations the Fed will cut, combined with the recent two-year budget deal that was agreed last week by the House which will prevent a government shutdown next year. That being said, lawmakers still have to address raising the debt ceiling in February. This could be a potential reason for the Fed to hold back until more clarity.
December 17th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist.
European markets have opened lower today, as investors avoided taking strong bets ahead of a policy meeting at which the US Federal Reserve would decide the timing of possible reduction in its stimulus measures. Closer home, investors eye UK November inflation data, to gauge the market direction. Trepidation across other asset classes too with the risk tone eroding somewhat into the European session.
Strong industrial production data out of the US yesterday kicked up Wall Street and Asian share markets overnight but in Europe, but European investors are now looking to the plethora of risk-events before adjusting appetite for risk. Out of the UK, we have consumer price inflation and PPI data due soon while in the euro zone, we also have inflation figures and the German ZEW survey. Inflation data out of the US will be eyed too as the Fed is likely to hint at inflation being below target in the US — we also have the US NAHB housing market report.
Onto the Fed, expectations of tapering continue to underpin price-action but most market participants believe the Fed will wait until early next year before starting the process as the US economy needs to shower greater momentum. Labour market indicators in recent weeks have been stronger, fuelling expectations the Fed will cut, combined with the recent two-year budget deal that was agreed last week by the House which will prevent a government shutdown next year. That being said, lawmakers still have to address raising the debt ceiling in February. This could be a potential reason for the Fed to hold back until more clarity.
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