The markets will be quieter on Thursday as the US and UK markets are closed. Thanksgiving is a national holiday in the USA and it is the second biggest holiday after Christmas.
The vibrancy of the market is also more muted on Friday.
“Tomorrow is Black Friday, traditionally known as the busiest shopping day of the year, and the published statistics are used as an important indicator of private consumption activity”, commercial bank the morning review says.
Today we received the forecast of German inflation figures for November.
In light of preliminary figures, inflation in Germany in November was slightly lower than expected at 2.2 percent on an annual basis, while the consensus of economist forecasts collected by the news agency Bloomberg expected it to have been 2.3 percent. In October, consumer prices rose 2.0 percent from last year.
From the previous month, prices did not rise at all, but fell by 0.2 percent. Economists were also expecting a 0.2 percent decline. In the previous month, prices rose by 0.4 percent from September.
With EU-harmonized figures, the change in prices was -0.7 percent in a month and 2.4 percent in a year. The forecasts were expecting higher inflation readings, when the forecasts were -0.5 and 2.6 percent.
Inflation readings for the entire euro area will be published tomorrow.
At the time of the review, the interest rate on Germany’s 10-year government bond was 2.6 percentage points higher at 2.131 percent.
The interest rate on the 2-year loan was 1.989 percent, down three percentage points.
On the foreign exchange market, the yen weakened slightly. At the time of review, one euro was worth 1.0532 dollars, 159.66 yen, 0.83154 pounds or 11.525 Swedish kronor. The dollar was 151.59 yen and the pound was 1.2667 dollars.
Interest rate reductions still pending
Member of the Executive Board of the European Central Bank Isabel Schnabel appeared like a hawk yesterday.
“According to his core message, the ECB should cut the interest rate only gradually in the current situation. Monetary policy should also not be pushed to a level that revives the economy, because inflation is still associated with upside risks and the economy is not in recession either.” Nordea states in his review.
On Thursday, a member of the board Francois Villeroy de Galhau said for his part that the central bank no longer needs to limit the economy, and it may have to raise interest rates to a level that supports growth.
Markets believe that the ECB’s interest rate cuts will continue due to the weak economic situation.
The ECB’s next interest rate decision will be heard in December, as well as the US central bank Fed, which is also believed to lower interest rates this spring.
Yesterday, inflation statistics, closely monitored by the Fed, were received from the USA.
Interviewed by CNBC Global X:n investment strategy director Scott Helfsteinin according to the Fed, Wednesday’s better-than-expected inflation data was a welcome update for the Fed ahead of the Thanksgiving holiday.
“This is a nice Black Friday gift for the Fed. They can eat turkey and watch football all day knowing they’re close to full employment with price stability.”
Source: www.arvopaperi.fi
