Today's Markets: Grinding to a halt

The weather is freezing, the country is grinding to a halt with only a fifth of rail services running, strike action is more widespread than at any time since 2011, real wages are shrinking - its not exactly stacking up to be a merry Christmas. But equities exist outside of the main street bubble and this morning shares across Europe are relatively flat as traders sit on their hands ahead of central bank pronouncements and interest rate hikes over the next couple of days. 

First out of the blocks in terms of economic data is US consumer price index data for November which is out later today and, according to forecasts, may have actually slowed from 7.7 per cent to 7.3 per cent - giving credence to hopes that inflation is peaking in the US at least. Tomorrow the Federal Reserve is likely to continue hiking interest rates but the key for investors will be the accompanying message and whether it hints at a pivot coming into view. 

Meanwhile, further signs that China is easing Covid restrictions, this time from Hong Kong where restrictions on the activities of incoming travellers have been removed - this follows yesterday’s removal of the need to use a travel tracing app in mainland China. The continued edging towards a ‘living with covid’ policy follows a string of public protests in the past month. The expectation of continued easing of covid restrictions in China has led to a pick up in the oil price after a period of sustained weakness recently as traders bet on an uptick in the economy there as we move into 2023. 

Sticking with energy, EU ministers will be watched closely today as they meet to try to thrash out a cap on gas prices in the EU bloc. The move is an attempt to shield the EU from soaring gas prices as we head into the coldest months of the year but so far attempts have floundered on the competing needs of different members of the bloc. 

For those hoping to escape the freeze, the Bahamas probably sounds like a nice option. Less so if you are the founder of a collapsed crypto exchange. Sam Bankman-Fried, the founder of FTX, was taken into custody in the Bahamas ahead of what is a likely extradition to the US to face charges relating to the collapse of FTX. Details of the charges he will likely face in the US are expected to be revealed today.