Investors express some caution in anticipation of this week’s Federal Reserve meeting
Wall Street stocks advanced on Friday after fresh economic data added to hopes for a soft-landing scenario. November’s nonfarm payrolls report showed the US economy added 199,000 jobs, slightly above the 190,000 estimate and well above the 150,000 jobs added in the previous month. Furthermore, the jobless rate fell to 3.7% in November from 3.9% previously. As such, the S&P 500 added 0.41% to hit a new high for the year. The Nasdaq Composite rose 0.45% and the Dow Jones gained 0.36%.
Asian equities were mixed-to-higher on Monday as investors express some cautious optimism ahead of this week’s Federal Reserve meeting and the US government report on consumer inflation. Hong Kong’s Hang Seng sank 0.92% and the Shanghai Composite added 0.74% after Chinese leaders agreed late last week to boost spending in order to support the economy. Leading the gains in the region, Japan’s Nikkei 225 was up 1.56% as it recovered from solid losses witnessed last week. Australia’s ASX 200 rose less than 0.1%, while South Korea’s Kospi added 0.3%.
After closing out last week in positive territory, European stocks were flat in early trading at the start of a busy week. Stock index futures on Wall Street were little changed in early premarket trade on Monday. Now, investors await the November US CPI due on Tuesday, and the Federal Reserve’s interest rate decision on Wednesday. On Thursday, the ECB and Bank of England will announce their monetary-policy decisions.
In currencies, the USD index extends Friday’s gains, buoyed by Friday’s strong jobs report coupled with more hawkish expectations ahead of this week’s Fed meeting. The dollar is back above the 104.00 mark, still struggling to overcome the 104.25 local resistance that capped gains last week. On the downside, the immediate support now arrives at 103.90, followed by the 103.50 region. Strong inflation data and more hawkish tone from the Fed could lift the greenback above the 105.00 mark this week.