Wall Street It went up this Tuesday (Dow Jones:+0.39%; S&P500:+0.25%; Nasdaq:+0.59%) in one transition session waiting for the employment report November that the consulting firm ADP will announce tomorrow. This, after starting the month of december in negative«a normal and even healthy rest.» This is what the Bankinter experts believe, for whom «it did not help that Trump has already decided who will be the candidate to succeed Powell at the controls of the Federal Reserve (Fed), with his current economic advisor, Kevin Hassett, sounding like the best positioned. Maybe a possible example of political interference in this body«Therefore, now all eyes are on the labor marketand more specifically in the data presented this Wednesday by ADP. The market expects it to show creation of 10,000 jobsbelow the 42,000 new payrolls in October. «Waiting for new catalystsespecially the meeting of the Federal Open Market Committee (FOMC) of the Fed next week (days 9 and 10), it is very likely that the stock markets will take advantage of the next sessions to consolidate the advances registered during the last week of November. It will be the aforementioned meeting, specifically what ‘do and say’ the Fedwhich determines the trend that these markets adopt towards the end of the year», they point out in Link Securities. In this sense, and after the disappointment of the American manufacturing ISM, which deepened into the contraction zone, Investors have raised the probability that the Fed will cut rates by 25 basis points at its meeting on December 10 up to 87%, according to CME’s FedWatch tool. «Judging by the data and the futures of federal funds, a rate cut next week seems very likely; Otherwise, the market reaction would be severe.«, indicates Ipek Ozkardeskaya, senior analyst at Swissquote. From a macro point of view, during the next few days the agenda includes the PMI and ISM services November (Wednesday), weekly unemployment data (Thursday) or September PCE consumption deflator (Friday), the Fed’s preferred indicator to measure inflation and which will see the light after the reopening of the Government.
WITHOUT LOSING SIGHT OF THE BOX
All this without losing sight of the Bank of Japan (BoJ)which is not encouraging the market much as options for a rate hike increase at its meeting on December 19, following comments from Governor Kazuo Ueda, who has indicated that the organization will «debate thoroughly» the possibility of a rate hike at its last meeting of the year. In fact, the Japanese government bond yields in the very long term chained new increases this Tuesday, in a movement that has triggered global alerts regarding the possibility that Japanese investors —large buyers of foreign debt— reduce their exposure to US and European bonds. This has also revived the fears around the ‘yen carry trade’a practice that for decades has allowed investors to finance themselves cheaply in yen to buy higher-yielding assets, such as Treasurys, stocks or bitcoin.
OTHER MARKETS
In other markets, oil West Texas has decreased by 1.15% ($58.63) and the Brent has given up 1.16% ($62.44). For his part, the euro has appreciated 0.12% ($1.1624), and the ounce of gold has lost 0.74% ($4,243). Furthermore, the 10-year American bond yield has relaxed to 4.086% and the bitcoin has shot up 6.61% ($91,024).
