US Markets recorded another record high on Friday and the European markets also echoed similar sentiment after posting a third successive positive week. US stock futures and European markets are off from their high and are trading mix, but investors are optimistic about the economic growth and that the central bank would continue to support their investments.
A cautious mood is generally the idea among traders today, as we are set to unravel the batch of the delayed US economic data. The US non farm payroll data will kick start the economic engine tomorrow and if there was no government shut down, this economic data could have been the key factor in determining the tapering quiz for the Federal Reserve’s chairman, Ben Bernanke.
Given that we have another US non farm reading due for October in few weeks therefore, this non farm reading could carry no much importance than a footnote. Provided that we had a government shut down for two weeks, the October non farm payroll data could very well be skewed as well.
As the shutdown has cost nearly $24billion for the economy, the challenges which Fed will face, will not only be limited to the unemployment rate, repairing the reputation & economy, but also perhaps preparing to accommodate for the debt ceiling circus which will return in February.
Therefore, loose monetary policy could possibly be in place for some time perhaps at-least Janet Yellen takes over.
This week will certainly have an importance of its own for the European markets from the prospective of their important economic indicators. The expectations are sky high for the sterling economy as we head towards the Q3 GDP estimates. The sentiment is that the Q3 GDP could have been much stronger than the Q2 GDP number and the forecast is nearly by a further increase of 0.8%.
The train does not stop here for the economic indicator for the FTSE 100 index which is trading towards its highs of its last week, the latest Bank of England minutes and latest CBI Business optimism figures for October are also due for the month of October this week.
Back in Europe, the German and French flash manufacturing and services PMI data for October is also due this week and the German IFO number could indicate a much better reading for the country as compared to the inflated ZEW number.