This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
It was always going to take a major disappointment in today’s non-farm payrolls to even hint at the Fed swerving away from a December rate increase. Today’s 211,000 number, just ahead of the 200K forecast, does not fall into that category. Indeed, it leaves the general perception of an imminent rate increase unchanged, with the upward revision to the previous month’s figure perhaps even strengthening it. US indices have risen, as the market continues to feel more and more comfortable with an increase in rates.
In Europe, the picture is very different – Mario Draghi’s failure to live up to inflated expectations has left continental markets firmly on the back foot, with a rising euro doing its best to make life difficult for stock markets. As December progresses, we may see them move from anger to acceptance, but for now the continent is not the place for equity market bulls.
The week ahead has key numbers contained within it, most notably from China and the UK, but overall it is the relatively quiet period between the ECB and the Fed. US retail figures at the end of the week will likely go toward confirming a pending Fed move, but perversely this may continue to provide support to equities, as markets realise that there is life beyond a rate increase.