According to the figures released by Destatis yesterday, inflation in Germany rose to 2.2 percent year-on-year in November, marking an increase compared to the 2.0 percent in October. Economists had already predicted the increase. Nevertheless, a month-over-month decline was observed; prices decreased by 0.2 percent compared to October.
Japan has experienced an increase in wholesale inflation for three consecutive months due to rising costs of raw materials and labor. This development comes just ahead of the BOJ’s policy meeting, where there is speculation about raising short-term interest rates from 0.25%. The corporate goods price index saw a 3.7% increase in November, surpassing expectations and marking the fastest annual rise since July 2023, driven by heightened prices in food, metals, and plastics.
In November, confidence among small business owners in the U.S. rose significantly, with the National Federation of Independent Business (NFIB) index climbing from 93.7 to 101.7, reaching its highest level since June 2021. This increase marks the first time in nearly three years that the metric has surpassed the fifty-year average of 98, partly due to anticipated shifts in economic policy following the election results. Entrepreneurs are optimistic about changes in tax and regulatory policies that promote economic growth and reduce inflation.
The 6M Euribor increased with 1 basis point to 2.66% compared to previous business day. The 10Y Swap is unchanged at 2.13% 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.
Gold prices reached a two-week high, climbing over 1% due to renewed gold purchases by China’s central bank after a six-month break. Spot gold increased by 1.1% to $2,662.98 per ounce, and U.S. futures rose 1% to $2,685.50. China’s role as the top gold buyer in 2023 underscores the importance of central bank activities in supporting gold’s rally amid anticipated U.S. Federal Reserve rate cuts and geopolitical tensions.
In November, China’s consumer price inflation fell to a five-month low, rising just 0.2% year-on-year, missing expectations of a 0.5% increase. Core inflation saw a slight rise, indicating moderate price pressures. Despite a decline in the producer price index (PPI) for the 26th consecutive month, the decrease was less severe than forecasted. Persistent low inflation highlights China’s struggle with weak domestic demand amid ongoing deflationary pressures in wholesale prices. While Beijing has implemented extensive stimulus measures, signs of economic recovery are visible in retail and manufacturing growth. However, forecasts expect deflation, influenced by factors like the U.S.-China trade tensions.
The Reserve Bank of Australia (RBA) maintained interest rates at 4.35% in its final meeting of the year, signaling a softening stance as it gains “some confidence” that inflation is moving toward its target range. The Australian dollar fell by 0.8% to $0.6380, and three-year bond futures rallied, indicating market expectations of a potential rate cut by April next year. Although Governor Michele Bullock emphasized that underlying inflation remains too high for immediate rate cuts, the market interpreted the omission of prior hawkish language as a dovish shift. Economic growth has been weaker than expected, with consumer spending yet to rebound significantly. While robust Black Friday sales were noted, the National Australia Bank reported business conditions have reached their lowest since late 2020.
The 6M Euribor increased with 1 basis point to 2.65% compared to previous business day. The 10Y Swap increased with 1 basis point to 2.13% 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.
U.S. stocks rose Friday, with the Nasdaq gaining 0.8% and tech giants like Amazon and Apple hitting highs, while the S&P 500 rose 0.3%. The November jobs report showed 227,000 new jobs, boosting expectations for a Fed rate cut in December, despite unemployment ticking up to 4.2%. Bitcoin surged past $101,000, fueled by optimism around crypto-friendly policies from the incoming administration.
Despite the collapse of the French government, investors saw a rebound as the CAC 40 Index gained 2.8% this week, buoyed by short-covering and optimism about relative political stability. Bonds rallied, narrowing French-German yield spreads to the lowest in two weeks, while the euro stabilized around $1.05. Speculation over tax hikes and budget delivery further fueled market confidence.
President Vladimir Putin eased payment rules for Russian gas, allowing foreign buyers to use banks other than Gazprombank for ruble conversions, mitigating supply concerns amid U.S. sanctions. This new mechanism aims to maintain gas flows to Europe despite sanctions but adds complexity, requiring cooperative banks and alternative settlement methods. While European gas prices showed initial relief, stakeholders remain cautious about the decree’s broader implications.
The 6M Euribor increased with 1 basis point to 2.64% compared to previous business day. The 10Y Swap decreased with 1 basis point to 2.12% 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.
Oil prices fluctuated as OPEC+ delayed planned output hikes until 2026, citing a potentially oversupplied market in 2025, while global crude production and exports surged. Market dynamics are influenced by soft Chinese demand, potential Trump policies, and geopolitical factors, with OPEC+ prioritizing price stability amid uncertainty. Analysts expect clearer market signals by March, considering sanctions on Iran, China’s economic response, and evolving US policies.
Market expectations for a Bank of Japan rate hike in December dropped sharply following reports suggesting caution within the BOJ, despite board member Nakamura not opposing higher rates. The yen rose, and bond futures fell amid mixed signals, as Nakamura’s comments were less dovish than anticipated but emphasized reliance on upcoming data. Speculation remains complicated by BOJ communication, wide global rate differentials, and uncertainty in inflation and wage growth trends.
Bitcoin’s price surged past $100,000, fueled by optimism over a pro-crypto Trump administration and institutional inflows, with analysts predicting a potential rise to $200,000 by 2025. Regulatory changes and increasing adoption as a “store of value” asset are seen as key drivers. Institutional investments, including spot ETFs and corporate allocations, continue to dominate demand.
The 6M Euribor is unchanged at 2.63% compared to previous business day. The 10Y Swap increased with 4 basis points to 2.13% 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.
Bank of England Governor Andrew Bailey anticipates four interest rate cuts in 2025 due to the faster-than-expected fall in UK inflation. The BoE’s forecast relies on market expectations for rates, with the OECD cautioning the UK might not be able to lower rates as much as other economies due to its unique growth and inflation challenges. Bailey acknowledged several potential economic scenarios, with the central forecast suggesting gradual rate reductions.
Bundesbank President Joachim Nagel advocates easing Germany’s debt brake to boost investment in defense and infrastructure, aiming to tackle stagnant economic growth. He suggests that reform and fiscal flexibility could enhance resilience amid challenges like potential US tariffs and weak manufacturing competitiveness. As Germany’s stable unemployment leans on low-wage jobs, revising the debt brake is a key election issue.
The EU is close to finalizing a historic free trade agreement with the Mercosur countries, but faces opposition from the Netherlands, France, and Poland due to agricultural concerns. The Mercosur agreement aims to reduce tariffs and other trade barriers, yet member states are worried about competition from cheaper imports that may not meet EU standards. To bypass potential national vetoes, the European Commission could separate the trade section for approval by a qualified majority, a strategy previously used for the Ceta agreement.
The 6M Euribor decreased with 5 basis points to 2.63% compared to previous business day. The 10Y Swap is unchanged at 2.09% 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.
The economic turmoil in South Korea, where President Yoon Suk-yeol temporarily declared a state of emergency, prompted a more cautious stance among Wall Street investors on Tuesday. Following a strong rally that had previously pushed U.S. stocks to new highs, the S&P 500 showed minimal movement with a slight gain of 0.04%, while the Nasdaq and Dow Jones fell by 0.8% and 0.17%, respectively. Traders are warning of potential market overheating as the initial optimism that propelled U.S. stocks to record levels now seems to be diminishing.
This afternoon, the French parliament will debate the votes of no confidence submitted by leftist and extreme-right parties against Barnier’s budget plans. The political turmoil in France is causing persistent unrest in the financial markets. This is particularly evident in the difference in interest rates between France and Germany, which has increased significantly since the election announcement.
Australia’s economy grew at its slowest annual rate since the pandemic in the third quarter, with government spending driving the growth while consumer activity remained subdued. Data from the Australian Bureau of Statistics (ABS) today showed a 0.3% rise in GDP for the quarter, below expectations, and annual growth slowed to 0.8% from 1.0%. In response, the Australian dollar decreased by 0.7% and expectations increased for an interest rate cut in the coming months.
The 6M Euribor decreased with 2 basis points to 2.68% compared to previous business day. The 10Y Swap decreased with 1 basis point to 2.09% 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.
Federal Reserve Governor Christopher Waller signals a potential December interest rate cut, pending steady inflation trends. Despite recent inflation data showing upward pressure, Waller remains optimistic about easing monetary policy to a more neutral setting. Upcoming employment reports will be pivotal in deciding the Fed’s next steps, aiming to balance economic growth with inflation control.
Asia-Pacific markets experienced an upswing on Tuesday, influenced by new record highs on Wall Street. Japan’s Nikkei 225 rose by 2.22%, and South Korea’s Kospi increased by 1.71% despite a higher-than-expected inflation rate in November. The Hang Seng Index in Hong Kong climbed 0.73%, while Australia’s S&P/ASX 200 gained 0.56%. Notably, key chip stocks surged, with Taiwan Semiconductor and several Japanese chip-related stocks posting significant gains, overshadowing new US export restrictions on semiconductors to China.
UK house prices rose at their fastest rate in two years, driven by strong market momentum and recent interest rate cuts. Mortgage approvals are at a high, with future stamp duty changes spurring buying activity. While affordability remains a concern, government efforts to boost construction may help address supply shortages and sustain market growth amidst economic recovery challenges.
The 6M Euribor decreased with 1 basis point to 2.70% compared to previous business day. The 10Y Swap decreased with 6 basis points to 2.10% 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.
Selling prices in the Dutch industry fell less sharply in October compared to September, according to Statistics Netherlands (CBS). Prices dropped by 1.2% year-on-year in October, versus a 2.1% decline in September.
Consumer prices in the Eurozone rose at a faster pace in November, reaching 2.3% year-on-year, up from 2.0% in October and 1.7% in September, as reported by Eurostat. The increase in November matched analysts’ expectations.
The number of unemployed people in Germany slightly decreased in November, but the unemployment rate remained stable, according to the Federal Employment Agency. In November, 2.77 million Germans were unemployed, compared to 2.79 million in October.
The 6M Euribor increased with 2 basis points to 2.71% compared to previous business day. The 10Y Swap decreased with 4 basis points to 2.16% 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.
German inflation remained unchanged at 2.4% in November, below expectations, as moderating food costs offset energy effects. The data strengthen the case for the ECB to cut interest rates further, with a reduction in December seen as likely, though officials remain cautious about balancing lowering rates with persistent inflation in services. The Bundesbank anticipates temporary inflation pressures into early 2025 but expects a decline by spring.
Norway’s DNB Bank plans to expand its use of significant risk transfers (SRTs) to reduce credit risk, following its first SRT deal involving a $1.6 billion loan portfolio tied to green projects. SRTs free up capital by transferring loan default risks to investors, enabling banks to increase lending while boosting solvency ratios. DNB joins other European banks in adopting SRTs, which attract strong demand from institutional investors like hedge and pension funds.
Oil prices held steady during the US Thanksgiving holiday, with West Texas Intermediate trading below $69 and Brent above $73, as markets anticipate an OPEC+ meeting delayed to December 5 to discuss production cuts amid glut concerns. US crude inventories dropped by 1.8 million barrels last week, ending a three-week rise. Analysts expect muted price action barring geopolitical developments.
The 6M Euribor increased with 1 basis point to 2.69% compared to previous business day. The 10Y Swap decreased with 3 basis points to 2.20% 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.
French markets are experiencing turbulence due to fears of a government collapse as Prime Minister Michel Barnier struggles to pass a budget involving € 60 billion in cuts and taxes without a parliamentary majority. The resulting sell-off has pushed French bond yields above 3%, and significant market indices like the Cac 40 have seen notable declines, especially affecting financial institutions. Political tensions intensify as far-right leader Marine Le Pen threatens a no-confidence vote, raising concerns over France’s fiscal health and its ability to meet EU debt targets.
US farmers are protesting the surge in Chinese used cooking oil imports, which are undermining domestic crop investments for low-carbon fuels under the Inflation Reduction Act. The law’s loopholes allow these imports due to unrestricted tax credits, threatening rural economies. Farmers are urging regulatory changes to prioritize American-grown feedstocks amid policy uncertainties.
President elect Donald Trump’s proposed 25% tariff on Canadian oil imports is likely to raise US gasoline prices, as Canada supplies over half of US crude imports. The tariffs aim to address issues like migration but risk disrupting integrated supply chains and North American energy security. US refiners depend on heavier Canadian crude, and analysts warn that replacing imports with domestic production is difficult, potentially leading to higher fuel costs for consumers.
The 6M Euribor decreased with 3 basis points to 2.68% compared to previous business day. The 10Y Swap decreased with 1 basis point to 2.23% 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.
