Stock markets: news from the U.S. has spurred the growth of global platforms
News from the U.S. has spurred the growth of global platforms and put pressure on the dollar at the end of last week. A very strong report on the labor market released Friday showed that the U.S. economy now resembles a full of energy Dobrynya Nikitich and absolutely in no hurry to slow down, as feared and traders in the end of the year. Employment in December was 312 thousand, and wage growth accelerated to 3.2% y/g: maximum value over the last 9 years. This is good news for stock markets and for raw materials: in this case, failed to even spur demand for the dollar, sending the EURUSD with 1.14 to 1.1345.
However, the U.S. currency failed to develop the offensive, because later fed Chairman Powell noted that “monetary policy may vary,” and that the Backup system is “ready to change direction.” This was perceived by markets as a signal for a pause in the increases, at least for the coming months. If the fed really going to soften the rhetoric, the fear of the turbulence of the markets, we may see a repetition of the situation which developed when Grinspena before the financial crisis. Then the FOMC raised rates too slowly, watching the cooling in some sectors of the economy, and the apparent overheating in the other (first of all, we are talking about the housing market). However, due to the mild policy of the stock and commodity assets within a few years there was a visible rally, which, however, turned into a great financial collapse, just like the story about “a bubble and a Straw”.
“The second of the casket” in current history became China’s Central Bank, which showed a similar easing last week, reducing reserve requirements, and spurring interest in the national credit.
Don’t miss this year’s first talks between the US and China, which are scheduled for today. The American side seems set to achieve concessions from China, though such an attitude looks overly optimistic: the Chinese are unlikely to recede in the negotiations, preferring a stimulus for our own economy.
However, to completely eliminate breakthrough in the debate is not: in such a scenario, the markets are a new force to jerk up, based on favourable macroeconomic conditions and softness in the key Central banks. However, remembering the fate of the “Frog-traveler”, to rely on “random birds” still not worth it.