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Week ahead: forecast for the 20-12-2021
Central Bank’s stepping into rate hike mode to cool red hot asset prices…oh…wait…. Is the ECB’s lack of action a buy signal for European stock markets??? Monday – Quite economic calendar day, UK CBI Trends due. Tuesday – Eurozone Flash Consumer Confidence data. Wednesday – US Consumer Confidence expected to show month-on-month gain. Thursday – Very active US Economic calendar, Consumption, Durable Goods, and New Homes Sales data on deck. Friday – Japan Consumer Price Index data due.
Buying dips & selling rallies
Trading sounds so simple when you first start out... “Just buy the dips and sell the rallies!” “Buy Low, Sell High!” Pffft. Is that it? How hard can it be?! The longer you spend around markets, the more you realise that it takes a lot more than a couple of platitudes to build a successful trading strategy.
Elon, Tesla & the curse of time
Sorry to be the bearer of bad news... It’s over. The top is in, the Tesla bubble has already been pricked and it’s time to strap in for a bumpy ride… My source? Why, the internet of course! For a few months now, industry veterans have been warning about frothiness in markets and the many parallels between the 2000 tech bubble and now. “This won’t end well” say the doomer boomers.
Time for gold to shine?
It’s not been a good year for the ‘hard money’ advocates. Gold as an inflation hedge hasn’t worked out, and even throughout this year when real yields have been negative, gold hasn’t benefited as many would expect… One of the big drivers of gold (and many other financial assets) is “real yields”. Basically, if an asset (such as a 10 year bond) yields 1.5%, and inflation rates are expected to be 2.5% over that same period of time (e.g. 10 years) then the REAL yield is actually negative at -1%. Real in this context is shorthand for “after-inflation”.
Week ahead: market insights for the 13th of December
Next week’s all about the central banks. We’ll see monetary policy updates from: - US Federal Reserve (Weds) - European Central Bank (Thurs) - Bank Of England (Thurs) - Swiss National Bank (Thurs) - Norges Bank (Thurs) - Bank Of Japan (Fri) Other key data points to watch this week: Mon: OPEC Monthly Report Tues: UK Employment, US PPI, Weds: China Retail Sales & Production, UK Inflation, Canada Inflation, US Retail Sales, Thurs: Australian Employment, US Jobless Claims, Philly & Kansas Fed, Fri: German ifo, UK Retail Sales We’ll also see a host of Flash PMI’s and even more central bank decisions outside of the big guns: Thursday sees Turkey’s latest interest rate decision with the Lira pushing for record lows. Banxico will set Mexico’s interest rate later in the day & Russia’s central bank is expected to hike on Friday.