Market Crash Incoming?
This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
US - China tension falls, Japanese Economy Struggles
Today’s events:
15:30 GMT+2 - Empire State Manufacturing Index
15:30 GMT+2 - PPI m/m
Tention falls
Before Joe Biden sat face-to-face with Xi Jinping on Monday night at a seaside resort in Bali, US officials played down hopes for tangible progress. The outcome easily exceeded those low expectations.
At the end of a meeting that ran about three hours, the US said the two sides would resume cooperation on issues including climate change and food security. Chinese Foreign Minister Wang Yi called it a “new starting point,” saying the meeting went longer than planned. Both sides “hope to stop the tumbling of bilateral ties and to stabilize the relationship,” he said in a briefing with state-run media.
Just four months ago, tensions between the US and China reached the highest point in years as House Speaker Nancy Pelosi flew into Taiwan. As a result, before the 20th Congress of the Chinese Communist Party, the US authorities announced a ban on the supply of high-tech technologies to China to slow down the development of advanced industries in the country.
A positive meeting outcome between the two leaders could positively impact US and Chinese tech stocks. US100 has formed a double bottom pattern on the daily timeframe with the target at 12 200.
Other news worth mentioning:
- FedEx to send employees in select US markets on unpaid leave as current business conditions reduce traffic volumes.
- JPMorgan cuts its forecast for China's GDP growth in 2022 to 2.9% (from 3.1% earlier).
- Bank of America November Poll: 72% (a record percentage) of global money managers believe the USD is currently overvalued.
- Villeroy (ECB) stated the Central Bank will continue to raise rates but may slow down the rate of increase.
- Australia meeting minutes: The Central Bank of Australia does not rule out a slowdown in the pace of rate hikes to a step of 0.5%. The Central Bank of Australia might take a pause in raising rates.
- Japan's economy enters recession as the country's GDP falls for the first time in four quarters. GDP growth decreases by 0.3% q/q and 1.2% y/y against the 1.1% growth forecast. The fall was caused by the rise in the cost of imports due to rising energy costs.
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