Global Economic Focus Shifts to Central Bank Decisions: Market Impacts

Mixed Economic Signals Impact Federal Reserve Bets

According to PANews, recent mixed economic data has influenced swap traders to decrease their bets regarding the Federal Reserve's path for easing policies. In the financial markets, the Dow Jones Industrial Average saw a notable decline of 1.82% this week, while the S&P 500 Index also experienced a downturn with a 0.64% drop, ending a promising three-week winning streak. In contrast, the Nasdaq Composite Index reported a modest increase of 0.34%.

Bitcoin's Strong Performance

Amidst these fluctuations, Bitcoin has manifested a remarkable seven-week rally, marking its longest streak of growth since 2021. This resurgence highlights the cryptocurrency's allure as investors anticipate key monetary policy changes in the upcoming period.

Upcoming Week: Critical Monetary Policy Decisions

The final week of significant monetary policy decisions for 2024 is set to command investors' attention. By the close of next Friday, at least 22 central banks, which collectively represent two-fifths of the global economy, will announce their borrowing cost decisions. These outcomes are likely to emphasize the increasingly disparate momentum of easing policies as policymakers navigate various risks anticipated for the coming year.

Key Events to Watch

• Monday: European Central Bank President Christine Lagarde will deliver a speech at 15:30 UTC+8.
• Tuesday: Bank of Canada Governor Tiff Macklem is scheduled to speak at 04:45 UTC+8.
• Thursday: The Federal Reserve will announce its interest rate decision and economic projections at 03:00 UTC+8, followed by a press conference with Fed Chair Jerome Powell at 03:30 UTC+8. Additionally, the Bank of Japan will reveal its rates, with Governor Kazuo Ueda hosting a press conference at 14:30 UTC+8.
• Friday: The United States will release revised third-quarter GDP annualized growth rates, initial third-quarter personal consumption expenditure rates, and the December Philadelphia Fed Manufacturing Index at 21:30 UTC+8.

Focus on Inflation and Consumer Spending

Importantly, the Federal Reserve's preferred core inflation measure, the Personal Consumption Expenditures (PCE) Price Index, is set to be unveiled next Friday. Economists forecast that the November PCE, excluding food and energy, may see a modest increase of 0.2%, potentially marking the smallest rise in three months. This report is also expected to reveal strong growth in consumer spending and income, underscoring the economy's resilience.

Conclusion

As the economic landscape continues to evolve, the upcoming decisions from central banks and the anticipated inflation data will play pivotal roles in shaping market expectations and investor sentiment in the weeks to come.