LIVE MARKETS Not if or when but at what speed?

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NOT IF OR WHEN BUT AT WHAT SPEED? (07:47 GMT)

That the US Federal Reserve is raising rates this year is obvious, surely? The key question, then, is how quickly will it tighten policy given uncomfortably high inflation.

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Refer to Friday’s Non-Farm Wages report, which might help provide an answer.

The latest US jobs report takes on heightened importance after the minutes of the December Fed meeting showed some policymakers were keen to tighten their policy even faster, including reducing the balance sheet by more than 8 trillion dollars from the Fed.

Economists polled by Reuters predict that the US economy created 400,000 new jobs last month compared to 210,000 in November. If the wage bill met expectations, 6.5 million jobs would have been created in 2021. read more

The data could trigger further volatility in global markets – consider US two-year rate-sensitive bond yields up nearly 15 basis points this week and are expected to experience their biggest weekly jump since late 2019. A bond market volatility gauge (.MOVE) hits its highest levels since March 2020.

A Reuters poll shows that currency analysts expect the dollar to extend its dominance through 2022, given the focus on the Fed’s outlook.

Almost two-thirds of 49 forex strategists polled by Reuters between Jan. 4 and Jan. 6 said interest rate differentials would dictate sentiment in major forex markets in the near term, with only two concerned about the new variants. coronavirus. Read more

Ahead of the payroll data, the flash estimate of euro zone inflation in December also has the potential to shake things up. Data from Germany on Thursday shows inflation in Europe’s largest economy remains high but could peak.

Asian stocks were on more solid ground, breaking two days of losses. European and US equity futures are also higher, as oil prices were heading for their best week since mid-December amid supply concerns amid growing unrest in Kazakhstan and blackouts in Libya.

Spotlight on non-farm payrolls in the United States

Key developments that should provide more direction to the markets on Friday:

– Samsung Electronics Q4 earnings jump more

– German exports increase, production drops slightly in November read more

– UK construction PMI in December

– December flash CPI of the euro zone, retail sales in November, consumer confidence in December,

– Non-farm payroll data in the United States in December, consumer credit in November

– Fed’s Daly and Bostic talk

(Dhara Ranasinghe)

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SET STOXX FOR THIRD WEEK EARNINGS (0735 GMT)

European stock markets are regaining ground. This would place the pan-European STOXX 600 (.STOXX) at its third consecutive weekly gain.

EUROSTOXX 50 futures are up 0.2%, while FTSE and Dax futures are flat as investors prepare to buy the lower after Thursday’s post-Fed minutes sell off.

On a busy day for economic data, Eurozone inflation data is due at 10:00 GMT. US employment data is due later today, as investors believe the numbers could reinforce the need to accelerate interest rate hikes in the United States.

(Joice Alves)

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