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Marketmind: All in on reopening

Published 2022-12-09, 12:35 a/m
© Reuters. FILE PHOTO: Pandemic prevention workers gather before their shift to look after buildings where residents do home quarantine, as coronavirus disease (COVID-19) outbreaks continue in Beijing, December 8, 2022. REUTERS/Thomas Peter/File Photo

A look at the day ahead in European and global markets from Ankur Banerjee:

Soft demand and weak economic activity remain a drag on China as the world's second-biggest economy slowly but surely shakes off its COVID restrictions. The path to reopening is unlikely to be smooth and straight-forward, with some finding it difficult to break out of habits formed during the strict lockdowns.

Investors though are riding on the reopening optimism. An index of Chinese gambling stocks is up more than 60% in two weeks, all while the spectre of an economic slowdown looms large. Next week's slate of central bank meetings will show us which way the interest rates are headed.

With market events scarce until next week, the spotlight will firmly be on U.S. producer price inflation figures later in the day for more clues about the health of the U.S. economy.

Meanwhile, Keystone pipeline in the United States was shut down after more than 14,000 barrels of crude oil spilled into a creek in Kansas. Yet oil remains pinned near one-year lows, as gloom about demand offsets the Ukraine war's strain on supply.

The cause of the leak is unknown and is the third spill of several thousand barrels of crude on the pipeline since it first opened in 2010.

In the corporate world, Microsoft (NASDAQ:MSFT)'s $69 billion deal to acquire "Call of Duty" maker Activision Blizzard (NASDAQ:ATVI) faces antitrust blowback with the U.S. Federal Trade Commission moving to block the biggest ever gaming industry deal.

Key developments that could influence markets on Friday:

© Reuters. FILE PHOTO: Pandemic prevention workers gather before their shift to look after buildings where residents do home quarantine, as coronavirus disease (COVID-19) outbreaks continue in Beijing, December 8, 2022. REUTERS/Thomas Peter/File Photo

Economic events: U.S. PPI data for November, Norway CPI data for November

Speakers: ECB's Christine Lagarde, Deputy Governor of the Riksbank Per Jansson

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