5 Key Developments to Follow In The Upcoming Week

5 key developments to follow in the upcoming week have been announced. The Omicron variant continues to influence the markets.

1. Omicron Variant

For now, Omicron seems to be transmitting faster than Delta. The emergence of the new variant turned the financial markets upside down and negatively affected the recovery in the global economy just as countries were starting to emerge from the shutdowns caused by Delta. Global economic growth forecasts could be lower due to the new variant, the IMF warned on Friday.

2. Inflation Data

The prominent data in the economic calendar will be the CPI data of November. Due to the collapse in the global supply chain, the US CPI reading rose 6.2% in October, the fastest annual increase in three decades. An increase of 6.7% is expected for November. Another strong reading could support expectations that the Fed will cut faster.

3. Volatility Will Continue

Stock markets, which were hit by the uncertainty created by the Omicron variant and the possibility of faster reductions from the Fed, saw a huge selling wave last week. It seems that this volatility will continue as investors prefer value stocks, which include banks, finance and energy companies, to growth and technology stocks. These stocks are expected to outperform as the Fed normalizes monetary policy.

4. Cryptocurrency Market

After a volatile week on the stock markets, Bitcoin slumped by as much as 20% on Saturday due to general sales in digital currencies. Other digital currencies such as Dogecoin and Shiba also saw huge sales, while Ether slumped over 10%. Concerns about regulatory pressure may be casting a shadow over crypto investments. Executives of major crypto firms like Coinbase (NASDAQ:COIN) will present before the US House Financial Services Committee on Wednesday amid calls for regulation of this notoriously volatile industry.

5. UK GDP Data

The UK will share its October GDP reading on Friday, and a good reading is expected as workers gradually return to work and retail sales are still strong. The latest economic data from the UK indicated that the central bank may raise interest rates for the first time since the beginning of the pandemic, in the face of increasing inflation.       Source: Investing.com