# Take Five: Ready for that Santa rally? Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-12-02 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Credit Suisse faces litmus test for rights issue Meta Description: Don't miss out on the latest updates on Credit Suisse's rights issue and the impact of shifting inflation on global markets. Stay informed with URL: https://financedigest.com/take-five-ready-for-that-santa-rallyhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-12-02t093808z1lynxmpeib10dzrtroptp4credit-suisse-gp-bonds-1736814774217-compressed.jpg) (Reuters) – Swiss lender Credit Suisse faces a litmus test over its rights issue, just one several trials markets must work through between now and year-end even if some are already gearing up for festive cheer. U.S. data will provide a reality check on the shifting nature of [inflation while policy makers at Australia’s central bank](https://www.financedigest.com/be-really-really-careful-on-inflation-bank-of-englands-haskel.html "Be ‘really, really careful’ on inflation – Bank of England’s Haskel") and OPEC+ ministers are due to meet. Here’s a look at the [week ahead](https://www.financedigest.com/wall-st-seen-steady-ahead-of-inflation-data-fed-later-in-week.html "Wall St seen steady ahead of inflation data, Fed later in week") in markets from Kevin Buckland in Tokyo, Pablo Mayo Cerqueiro, Dhara Ranasinghe and Karin Strohecker in London, and Ira Iosebashvili in New York. 1/FRANC DISCUSSION [Credit Suisse](https://www.financedigest.com/mitsubishi-ufj-to-postpone-at1-bond-issuance-in-credit-suisse-fallout.html "Mitsubishi UFJ to postpone AT1 bond issuance in Credit Suisse fallout") executives may need to sit down for an honest chat about whether the bank’s latest strategic plan is enough to rally investors. [Shares in the Zurich-based group hit new lows in recent days as shareholders were asked to pump about 2.2 billion](https://www.financedigest.com/abb-to-launch-1-billion-share-buyback-on-april-3.html "ABB to launch billion share buyback on April 3") Swiss francs into a restructuring programme aimed at reigning in its embattled investment bank. The moment of reckoning will come on Thursday when the rights issue closes, potentially leaving the underwriting [banks with a big chunk of leftover shares](https://www.financedigest.com/bank-shares-rise-after-credit-suisse-rescue-eases-crisis.html "Bank shares rise after Credit Suisse rescue eases crisis") in their books. As one fund manager put it, there are many other banks trading at discounted valuations with a clearer [profitability outlook](https://www.financedigest.com/ford-posts-lower-profit-issues-downbeat-outlook-shares-drop.html "Ford posts lower profit, issues downbeat outlook; shares drop"). [Investors face](https://www.financedigest.com/wave-of-lawsuits-over-ftx-expected-but-investors-will-face-legal-hurdles.html "‘Wave’ of lawsuits over FTX expected, but investors will face legal hurdles") a tough choice. Graphic: [Credit Suisse](https://www.financedigest.com/swiss-franc-grapples-with-safe-haven-identity-crisis-after-credit-suisse.html "Swiss franc grapples with safe-haven identity crisis after Credit Suisse") goes off piste https://www.reuters.com/graphics/CREDITSUISSEGP-REVAMP/jnvwyeowqvw/chart.png ![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/14-1736814775281-compressed.jpg) 2/DON’T SLACK OFF YET In a [year full of twists and turns](https://www.financedigest.com/2043-the-year-britain-will-turn-cashless.html "2043: The year Britain will turn cashless"), markets know not to take any signs of calm for granted. Mainland China’s biggest wave of civil disobedience since the 1989 Tiananmen protests is the latest curveball thrown at markets. Its impact on Beijing’s stringent COVID-19 policies and re-opening of the world’s No. 2 economy will be watched closely. And with the Federal Reserve, European Central [Bank and Bank of England](https://www.financedigest.com/bank-of-england-raises-rates-to-3-5-says-inflation-has-peaked.html "Bank of England raises rates to 3.5%, says inflation has peaked") meeting in coming weeks, the drama isn’t over. Speculation about how quickly a [peak in interest rates](https://www.financedigest.com/ecbs-centeno-says-interest-rate-close-to-peaking-if-no-new-shocks.html "ECB’s Centeno says interest rate close to peaking if no new shocks") will come remains in focus. For some, the notion of peak rates, peak inflation and China’s reopening is [reason enough for cheer](https://www.financedigest.com/despite-the-headwinds-investors-have-important-reasons-to-be-cheerful.html "DESPITE THE HEADWINDS, INVESTORS HAVE IMPORTANT REASONS TO BE CHEERFUL"). Emerging [stocks](https://www.financedigest.com/mutual-funds-vs-stocks-which-is-better.html "stocks") just had their best month since 2009. After months of pain inflicted by high [inflation and aggressive rate](https://www.financedigest.com/german-inflation-rate-to-ease-over-course-of-2023-econ-minister.html "German inflation rate to ease over course of 2023 – econ minister") increases, perhaps it’s time to bring on the Santa rally. Graphic: Emerging stocks bounce back in November https://www.reuters.com/graphics/GLOBAL-MARKETS/movaknryova/chart.png ![](https://onlineworldnews.com/wp-content/uploads/2022/12/66.jpg) 3/SHIFTING INFLATION Monday’s U.S. [service sector data will provide a signpost on how the economy is faring given 375 basis points](https://www.financedigest.com/service-the-cfo-why-context-is-worth-80-iq-points.html "Service & The CFO: Why Context Is Worth 80 IQ Points") of Federal Reserve rate increases to fight decade-high inflation. October’s reading showed that [businesses continued to face higher prices for inputs even as the service industry grew at its slowest pace in nearly 2 1/2 years](https://www.financedigest.com/2018-is-a-year-of-regulation-is-your-business-ready.html "2018 is a year of regulation – is your business ready?"), confirming inflation was shifting to services from goods. Signs of this trend intensifying could exacerbate worries that [higher prices may be more stubborn than expected despite the Fed’s](https://www.financedigest.com/asia-shares-creep-higher-wary-on-fed-and-boj-outlooks.html "Asia shares creep higher, wary on Fed and BOJ outlooks") all-out efforts. That shift has also been on Fed chair Jerome Powell’s mind, adding to concerns over a tight labour [market that will have to be brought back](https://www.financedigest.com/analysis-bond-traders-get-their-swagger-back-in-rate-obsessed-markets.html "Analysis-Bond traders get their swagger back in rate-obsessed markets") into balance. Graphic: U.S. services sector growth https://www.reuters.com/graphics/GLOBAL-MARKETS/THEMES/mopaknrwopa/chart.png ![](https://onlineworldnews.com/wp-content/uploads/2022/12/666.jpg) 4/TAKING A BREAK DOWN UNDER The Reserve [Bank of Australia is as likely as not to leave rates](https://www.financedigest.com/bank-of-englands-mann-doubles-down-on-backing-for-rate-hikes.html "Bank of England’s Mann doubles down on backing for rate hikes") right where they are on Tuesday, according to traders emboldened by signs of a peak in price pressures. Inflation unexpectedly slowed in October, and quite sharply, leading money [markets to bet it is a coin toss between a pause](https://www.financedigest.com/tech-earnings-hit-pause-button-on-market-rally.html "Tech earnings hit pause button on market rally") in the cash rate at 2.85% or another quarter-point bump. Economists are more confident, unanimously picking an increase. But some now [say a move in December](https://www.financedigest.com/post-brexit-insurance-reform-clear-before-december-says-boes-woods.html "Post-Brexit insurance reform clear before December, says BoE’s Woods") could be the last for this cycle. That wouldn’t necessarily cut short a [rally in Aussie dollar](https://www.financedigest.com/dollar-jumps-u-s-stocks-buck-global-rally.html "Dollar jumps, U.S. stocks buck global rally"), which recently has been driven more by China’s re-opening hopes and a retreating greenback than the RBA. Graphic: Raise or pause? https://www.reuters.com/graphics/AUSTRALIA-ECONOMY/RATES/zjvqjklynpx/chart.png ![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/6666-1736814774749-compressed.jpg) 5/OPEC GOES VIRTUAL Representatives from OPEC+ crude producers meet on Sunday to discuss output targets for the [world’s top](https://www.financedigest.com/top-10-fastest-bikes-in-the-world.html "Top 10 fastest bikes in the world") producers were expected to gather in person in Vienna for only the second time since the pandemic. A recent decision to meet online instead has raised doubts over whether the group will decide to deliver more supply cuts or leave policy unchanged. The meeting comes as markets are bracing for a pending European Union deal over the [price cap on Russian oil](https://www.financedigest.com/oil-prices-stable-heading-for-weekly-gain.html "Oil prices stable, heading for weekly gain"), as well as a Dec. 5 deadline imposed by the bloc for a full embargo on purchases of Moscow’s seaborne crude. [China’s COVID](https://www.financedigest.com/who-urges-china-to-share-specific-data-regularly-on-covid-situation.html "WHO urges China to share specific data regularly on COVID situation") lockdowns have added to pressure on demand and prices. Latest polls predict Brent oil prices will hold above the $100 level a barrel for the rest of 2022, but tick [lower to around $93 next year](https://www.financedigest.com/spains-inflation-to-be-lower-this-year-than-in-2022-minister.html "Spain’s inflation to be lower this year than in 2022 -minister") as economic concerns prevail. Graphic: Reduced output https://www.reuters.com/graphics/GLOBAL-MARKETS/THEMES/lbpggnxwnpq/chart.png ![](https://onlineworldnews.com/wp-content/uploads/2022/12/646.jpg) (Compiled by Karin Strohecker; Graphics by Vincent Flasseur, Sumanta Sen, Pasit Kongkunakornkul, Vineet Sachdev and Kripa Jayaram; Editing by Gerry Doyle) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---