Market Information Thursday 12 December 2024

In November, US inflation rose to 2.7%, aligning with Wall Street forecasts and paving the way for a potential Federal Reserve rate cut, expected to be a quarter-point, next week. The increase was primarily driven by a 0.3% rise in the shelter index and indicates a 98% probability of a rate cut according to market pricing. Concerns remain about balancing inflation control with maintaining a healthy labor market, amid potential policy shifts with the incoming Trump administration.

Business leaders warned UK Chancellor Rachel Reeves about the significant impact of recent Budget tax rises, including a £25bn increase in employers’ national insurance contributions, on investment and recruitment. At a British Chambers of Commerce meeting, executives expressed concerns over the challenging economic environment, with only a minority expecting improvement within a year. Chancellor Reeves defended the tax increases as necessary for fiscal stability, while acknowledging that tough decisions were made to address a £22bn “black hole” in public finances and laying foundations for future growth.

The Biden administration will impose new tariffs on Chinese solar wafers and polysilicon, doubling to 50%, and a 25% levy on tungsten to protect US manufacturing. Effective January 1, these measures aim to bolster the US solar sector and reduce reliance on Chinese materials, amid ongoing US-China trade tensions. This move concludes Biden’s efforts to support US industries with subsidies and tariffs against China.

The 6M Euribor is unchanged at 2.66% compared to previous business day. The 10Y Swap increased with 2 basis points to 2.15% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.