Key economic indicators to be released keep financial markets uncertain - Chris Harmse

FINANCIAL markets domestically and around the globe performed mixed but nervously last week.

- CHRIS HARMSE

Markets await the release of the US non-farm payrolls for November, of which the date remains uncertain, and the decision by the Federal Reserve's Foreign Open Market Committee (FOMC) next week (10 December) on interest rates before decisions on risky assets will be taken.

These key indicators will weigh heavily on equity, bond rates, and foreign exchange rates for the rest of December. A further 25 basis points cut by the FOMC would be the third consecutive lowering of its bank rate since its September meeting. Analysts and investors are raising their expectations for lower rates after New York Fed President John Williams commented last week that there was room for “a further adjustment in the near term to the target range for the federal funds rate”

In reaction to this improved sentiment for risky assets US Wall Street started to improve at the end of last week. The heavy tech weighted Nasdaq on Friday advanced its fifth consecutive day of gains, improving by 0.65%, and ended higher for the week by 4.9% even as it recorded a losing month of -1.9%. The Dow Jones industrial index shot up last week by 3.9%, while the broader S&P500 index ended the week 3.2% higher, and managed to close for the month in the green.