Last week, the hawkish interest rate cuts by the Federal Reserve impacted the US stock market. Due to the Christmas holiday, the European and American markets will be closed for a certain period of time this week. However, the topic of whether the "Christmas market" will be absent remains hot. Institutions believe that the US stock market may face some pullback and volatility pressure, depending on whether US bond yields can further rise.
On Wednesday of this week, Bank of Japan Governor Kazuo Ueda will deliver a speech; On Friday, the Bank of Japan released the opinions of the members of the December monetary policy meeting review committee. The Bank of Japan remained "inactive" last week, and whether the speech by Kazuo Ueda will release a signal to raise interest rates in January next year has become a focus of market attention.
This week, the United States will release important data such as new durable goods orders, new housing sales, and crude oil inventories.
Institutions discuss US stock market 'Christmas' trend
Last week, the hawkish interest rate cuts by the Federal Reserve cooled market expectations of a rate cut, causing a fierce sell-off in the US stock market. Despite a significant rebound on Friday, the weekly lines of the three major indices still showed a clear decline. Data shows that last week, the Dow Jones Industrial Average fell 2.25%, the S&P 500 index fell 1.99%, and the Nasdaq index fell 1.78%.
Due to the Christmas holiday, the European and American markets will be closed for a certain period of time this week. However, the topic of whether the "Christmas market" will be absent remains hot.
It is reported that the "Christmas market" refers to the last five trading days of the year and the first two trading days of the new year. From a historical perspective, the US stock market has shown a positive trend over the past 7 days.
Institutions believe that the US stock market may face some pullback and volatility pressure, depending on whether US bond yields can further rise.
Matt Maley, chief market strategist of Miller Tabak, said that in addition to the uncertainty of the path of the Federal Reserve to cut interest rates, another factor that worried US stocks was the rise in the yield of US treasury bond bonds. The yield on 10-year US Treasury bonds reached 4.55% last week, the highest level in over six months.
Will the speech by Kazuo Ueda signal a rate hike?
This Wednesday, Kazuo Ueda will give a speech; On Friday, the Bank of Japan released the opinions of the members of the December monetary policy meeting review committee.
The Bank of Japan remained "inactive" last week, and whether the speech by Kazuo Ueda will release a signal to raise interest rates in January next year has become a focus of market attention.
On December 19th, the Bank of Japan announced an 8:1 vote to maintain the benchmark interest rate unchanged. Regarding this, Kazuo Ueda stated that the Japanese economy is experiencing a moderate recovery and prices are expected to gradually rise, but there is still high uncertainty regarding the Japanese economy and inflation.
When it comes to the follow-up policy path, in addition to regular economic and inflation data, Kazuo Ueda stated that he will evaluate the situation next spring and the impact of US policies on Japan's inflation.
Charu Chanana, Chief Investment Strategist at Saxo Markets, believes that it is not entirely surprising that Kazuo Ueda has stated that he maintains "maximum flexibility" in his January decision.
Analysts say that if the Bank of Japan decides to raise interest rates by March or later, there is a risk of further weakening of the yen exchange rate.
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