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The Week Ahead: Be Ready For Market Turmoil

So now we know. The US jobless rate has fallen to a nine-year low, and 178,000 jobs were created in November. It seems almost irrelevant now to look at other economic data. The US Federal Reserve will, according to bond traders, very likely increase interest rates this month.

However, there are some notable speeches next week from some influential Fed officials. They include William Dudley and James Bullard. But they are unlikely to say anything that would change the market’s minds about the direction of US interest rates.

China will report November trade data on Thursday. Both imports and exports have fallen, which would suggest that the Chinese economy is slowing down. Imports fell 1.4% last month, while exports slumped 7%, which is the lowest for six months.

Meanwhile, inflation in China climbed to its highest since April. The rate rose to 2.1%, with the politically-sensitive food prices up by 3.7%. That said, inflation in China is still below its long-term average of 5.4%.

The European Central Bank will announce its latest interest-rate decision on Thursday. Last month, the ECB left interest rates unchanged at 0% for the sixth months. It said that interest rates could remain at present or lower levels for an extended period of time.

And finally, Italy will count the cost of its Sunday referendum. Prime Minister Matteo Renzi has staked his political career on the outcome. He has said that he would resign if the nation voted “No” to a change in the constitution. A “Yes” vote could change Italy’s constitution appreciably. Either way it could mean market turmoil.

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