Investing.com — This week’s inflation numbers are likely to test investors’ mettle, with Friday’s strong jobs report and uncertainty surrounding President Donald Trump’s policy plans. Oil prices are at multi-month highs as earnings season begins and energy traders brace for supply disruptions. Let’s see what happens in the market over the next week.
inflation data
A resurgence in inflation will highlight Wednesday’s CPI data as one of the key risks facing the stock market.
Markets are already betting on the Federal Reserve after Friday’s unexpectedly strong jobs report showed payrolls fell by 4.1% over the past month, well above the expected 160,000. Expectations for the next interest rate cut have been postponed until June.
Economists expect the CPI to rise in December from a year ago.
The Fed was confident that inflation had eased enough to start cutting interest rates in September, but annual inflation remains above the Fed’s 2% target. The Fed currently projects inflation to rise 2.5% in 2025.
Minutes from the Fed’s latest meeting released Wednesday showed policymakers worried that President Trump’s trade and immigration policies could prolong efforts to get inflation back on target.
Major banks start earning
JP Morgan (NYSE:), wells fargo (New York Stock Exchange:), citygroup (NYSE:) and Goldman Sachs (NYSE:) are scheduled to report fourth-quarter results on Wednesday, while Bank of America (NYSE:) and morgan stanley (NYSE:) will report results on Thursday.
It’s expected to be a good earnings season for U.S. banks, thanks to solid investment banking fees, strong trading income and easing pressure to raise deposit rates.
Expectations for bank performance have also increased following Mr. Trump’s election victory. The next president is expected to usher in a wave of deregulation and business-friendly tax reform, which could significantly improve banks’ profitability.
The company’s profit is expected to rise nearly 10% year-over-year in the quarter, according to LSEG IBES data cited by Reuters.
uk inflation
All eyes will be on Britain’s inflation figures on Wednesday after last week’s slide in British government bonds (gilts) increased pressure on the New Labor government as it seeks to stimulate the moribund economy.
UK government bond yields reflected waning expectations for Bank of England interest rate cuts, the new government’s October 30 budget for additional borrowing, and rising US bond yields as Mr Trump is expected to pursue looser fiscal policy and raise tariffs. It has been steadily rising since September.
The CPI is expected to rise at an annual rate of 6% in December, remaining above the Bank of England’s 2% target.
Deputy Governor Sara is scheduled to speak on Tuesday, and MPC member Alan Taylor is scheduled to speak the following day, and comments from central bank officials are also likely to attract attention.
china data
China is set to release a trove of data over the weekend, giving investors a chance to see how its second-largest economy is faring as it faces the blow of impending U.S. tariff hikes.
Economic data to be released on Friday is expected to confirm that the economy has achieved the 5% annual growth target for 2024 announced by President Xi Jinping in late December.
The Beijing government also plans to release data on , , and .
China’s Vice Finance Minister Liao Min said on Friday that China has plenty of fiscal policy space and tools to support economic growth this year and will step up spending to boost investment.
oil sanctions
Oil prices rose more than 3% to a three-month high on Friday as traders braced for supply disruptions from the most far-reaching U.S. sanctions targeting Russia’s oil and gas revenues.
President Joe Biden’s administration has imposed new sanctions targeting Russian oil producers, tankers, intermediaries, traders and ports, aimed at attacking every step of Moscow’s oil production and distribution chain. did.
Futures prices exceeded $80 per barrel for the first time since October 7, and settled at $79.76 per barrel. It settled at $76.57 per barrel.
Analysts said the timing of the sanctions ahead of Trump’s inauguration on January 20 makes it likely that he will keep them in place and use them as a tool to negotiate a peace treaty with Ukraine.
