Back on the Table
Strong nonfarm payrolls data on Friday suggests that the Fed may taper its stimulus sooner rather than later.
James Bullard, the governor of St. Louis Fed stated on Monday that as labor market conditions improve, the tapering odds have risen as well, making a move in December back on the table.
The FOMC is scheduled to meet on 17-18 December and it risks of tapering after the release of the US payrolls last Friday which saw a strong result. According to Bloomberg, about 34% of the economists see a tapering in December, up from 17% in prior sessions.
China’s Data
China’s retail sales data is set for release on Monday along with the release of industrial production data.
Retail sales is seen up 13.1% YTD while compared to the same period last year, sales is seen up 13.2%.
Industrial production is expected to stay robust, growing by 9.7% YTD and 10.1% YOY.
Technically Speaking...
JCI posted strong gains on Monday as it tracks the global mood. The index finished back above 4,200, but it still has a lot to prove for now.
Nearest resistance comes at 4,300-4,330 while the support remains at the recent low at 4,161.
MACD has ticked up but still below the zero line. RSI too, is going curling up, but still inconclusive of any bullish divergence pattern at the moment. Downside risk will diminish if a strong rally can push MACD back above the zero line while pulling up the RSI to form a bullish divergence.
No changes in the reco pool so far.
Day Ahead
As the FOMC meeting approaching fast, the market has now think that tapering is okay because the economy is on the right track to recovery, as witnessed by the solid payrolls data in November. China’s data could also steal the show.
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