What’s in store for markets next week?

The end of the year is just a few hours away and the events of the year have been widely analysed by those following the financial markets. Meanwhile many of the investors and traders have taken their usual holiday, particularly as the end-2015 has provided them with a range of excuses to take some profits.

However, as soon as next week, we could see a more active market and potentially more volatility as the economic calendar is loaded with a flurry of data releases. To start with, on Monday we will get an insight into the momentum of the manufacturing sector across several major economies (China, the US, Germany, Italy, Spain and France) which will serve to assess the state of the global demand and the potential gains/losses after the recent forex dynamics. Indeed, there is a fair amount of controversy around the implications of the weaker Euro for the competitiveness of the European economy in a world which seems to have transitioned to lower demand growth.

Next week investors will have to digest as well the preliminary reading for the December Eurozone inflation. With the European government yields closing the year at low levels and inflation expectations hit by the renewed...