China continues to show some improvement on macroeconomic data while market monitor higher oil prices which can boost higher future inflation expectations. It will be interesting to see how markets will react today (one day before Fed’s hike) and the day after to tomorrow (a day after Fed’s hike). The most possible scenario is that even if we see a sell off on stock market after FOMC meeting it will be followed by a buying opportunity in a longer time frame.
The outlook for gold remains bearish and at this stage any bullish pullback should be consider as a selling opportunity.
We will continue to keep an eye on Italy and on Greece that will probably enter to another period of political crisis and turmoil. We do not expect much changes in the European macroeconomic data today where we think that the moderate economic recovery will gain momentum.
Daily Key points:
• The two-year US Treasury bond yield rose on Monday to its highest level since 2010 at 1.15 per cent.
• UniCredit to cut 14,000 jobs in €12bn shake-up.
• All 120 economists in a Reuters poll expect a rate hike in the wake of a string of solid U.S. economic reports.
• Central London Home Prices Tumble; Biggest December Decline In Six Years.
• Bitcoin price rises to 2014 high as Chinese stocks suffer.
• Australian business conditions fall to lowest since 2015.
• Turkish bond yields surge to all-time high.
• Rouble at 14-month high after oil production agreement.
Daliy Economic calendar:
|Germany||German Final CPI m/m||Medium||0.1||0.1||Euro||10:00|
|Italy||Italian Industrial Production m/m||Medium||-0.8||-0.3||Euro||12:00|
|Germany||German ZEW Economic Sentiment||Medium||13.8||14.2||Euro||12:00|
|Europe||Employment Change q/q||Medium||0.4||0.3||Euro||12:00|
|Japan||Tankan Manufacturing Index||Medium||6||10||Yen||2:50|