The Italian referendum: What’s at stake? And what might be the impact?

In this week’s video update:

  • U.S. jobs reports for November point toward a likely Fed rate hike in December
  • The Italian referendum vote is just days away. What are the potential implications?
  • U.S. 10-year-Treasuries hit a 17-month high. Why?

Two events dominated the focus of global markets this week: The U.S. jobs report and the coming Italian referendum.

Chief Investment Strategist Erik Ristuben was joined by Todd LaFountaine, program director, advisor insights, to discuss this week’s market news. Ristuben first weighed in on the impact of the U.S. jobs report on the coming U.S. Federal Reserve (Fed) meetings on Dec. 13 and 14. With U.S. employers adding 178,000 jobs in November and unemployment sinking to 4.6%—the lowest unemployment number since 2007—Ristuben stated that the Fed is still very much expected to raise rates in December.

U.S. 10-year Treasury bonds also hit a 17-month high this week, which Ristuben attributed to President-elect Trump’s proposed spending and trade policies and the likely inflation increase that could come with them. Russell Investments’ strategists believe that pace of increase for Treasuries will slow and expect end-of-2017 rates to hover around 2.5%.

The Italian referendum vote on Dec. 4 is also grabbing headlines. Ristuben gave a quick rundown on the details of the vote and what’s possibly at stake for European and global markets. The short story is that strategists at Russell Investments do not expect the outcome to cause a major market event. But, as Ristuben stated, it is indeed political uncertainty. And political uncertainty always has the potential to create volatility in markets.