Take Five: Everything to play

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LONDON — The final month of the year is nearly here, but there’s no time to slow down just yet, with the latest US jobs numbers and eurozone inflation data at come.

And don’t forget the turmoil in the crypto world, growing concern over China’s economic outlook given the resurgence of COVID-19, and speculation in the world of football (which goes beyond the World Cup winner prediction).

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Here’s a look at the week ahead in the markets of Saqib Iqbal Ahmed in New York, Vidya Ranganathan in Singapore and Alun John, Marc Jones and Dhara Ranasinghe in London.

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1/ ANOTHER JOB SURPRISE?

Markets are hoping that the Federal Reserve will soon slow the pace of its aggressive rate hikes. Friday’s jobs data in November could put that expectation to the test.

The U.S. economy likely added 200,000 new jobs, according to a Reuters poll of economists’ forecasts, which would be the smallest gain since December 2020. Estimates ranged from 150,000 to 240,000.

A higher than expected 261,000 new jobs were created in October, even as the pace of job growth slowed and the unemployment rate rose to 3.7%, suggesting easing conditions of the labor market.

Still, five of the last six jobs reports have topped consensus estimates and another high reading could spell trouble for U.S. stocks, cooling the S&P 500’s 12% rally since mid-October. The dollar, weakened by expectations that rates may soon peak, could head higher.

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2/ A FEVER ANTICIPATION

Record numbers of COVID-19 infections and new lockdowns across China have dashed hopes of the world’s second-largest economy reopening in the first quarter of 2023.

However, there are other reasons for hope. Regulators have announced a plan to support a struggling real estate sector, and four people with direct knowledge told Reuters that China’s central bank will offer cheap loans to financial firms to buy bonds issued by property developers.

Authorities also appear set to fine Jack Ma’s Ant Group more than $1 billion, paving the way for the end of the fintech company’s two-year regulatory overhaul.

It’s going to be a cold winter, though.

Manufacturing indicators, mainly PMIs, due next week could reflect the weakness already seen across the economy. Beijing has hinted at reducing bank reserve requirements to help support the economy. Economists estimate that China will do what it takes to achieve growth above 5% next year.

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3/ NO PEAK HERE

Inflation in the United States may be close to a peak, but price pressures in the euro zone remain strong, as Wednesday’s preliminary estimate of November inflation in the bloc will likely show.

Eurozone inflation was 10.6% in October, more than five times the European Central Bank’s 2% target. An underlying measure eliminating food and energy price volatility remains well above target.

ECB Vice President Luis de Guindos warns that continuing inflationary pressures should not be underestimated. The ECB has raised rates by 75 basis points in each of its last two meetings, taking them from 200 basis points to 1.5% in just three months.

Markets are pricing in an 80% chance of another 75 basis point hike in December. Indeed, the Fed may be preparing to slow down the pace of its rate hikes, but the ECB is not there yet.

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4/ THE DOMINO DANCE

Cryptocurrencies will likely remain under pressure as the industry nervously waits to see if any of the dominoes tottering after the collapse of crypto exchange FTX fall.

Leading the way was crypto broker Genesis, which said on Monday it had “no immediate plans to file for bankruptcy” after media reports it was struggling to raise funds for its crypto unit. ready.

Bitcoin fell to $15,479 on the day – a two-year low – although it held up better than expected, having traded largely sideways since FTX’s collapse.

However, the crypto markets are in disarray, and December CME bitcoin futures are trading around $16,000, while the token itself is around $16,400. That’s a massive reduction by recent standards.

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5/ BALL PARK FIGURES

Maybe World Cup fever is getting everyone excited, but suddenly England’s two most famous football clubs, Manchester United and Liverpool, are up for grabs.

AC Milan as well as Roman Abramovich’s forced sale of Chelsea have already netted top dollar this year, so eye-watering valuations – nearly 7 billion pounds ($8.48 billion) in the case of United – are grouped together for this prized pair.

Both clubs have American owners looking to head into the tunnel, but where potential buyers are coming from, particularly at these prices when recessions and trophy droughts loom, is unclear. Nevertheless, a host of billionaires, wealth funders and private equity bankers cheer from the sidelines.

(Compiled by Dhara Ranasinghe; Graphics by Vincent Flasseur, Sumanta Sen, Pasit Kongkunakornkul, Vineet Sachdev and Kripa Jayaram; Editing by Barbara Lewis)

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