Market Report.
🌅 Good morning Markets. The two key events of today and perhaps all week are, undoubtedly, the inflation rates PCE that we will know today, and which should be determinant on the position of the fed and the types of interest near, and the growth rate of the GDP of the EU.
📉 U.S. markets traded mixed on Thursday as investors digested new data showing that announced job cuts for November pushed total layoffs this year past 1 million.. Rate cut bets sink dollar.
📊 Initial jobless claims fell 27,000 to a seasonally adjusted 191,000 for the week ended November 29, the lowest level since September 2022. The elevated continuing claims suggest a steady rise in the unemployment rate in the coming months, with the jobless rate estimated around 4.4% in November. We have a mixed picture, high announced layoffs and weak ADP/private payrolls point to cooling, but very low claims point to ongoing job security for those currently employed.
📈 The U.S. unemployment rate was unchanged around 4.4% in November compared to 4.46% in October, according to an estimate from the Chicago Federal Reserve. The mixed signals from the various employment indicators could influence the Federal Reserve’s policy decisions.
🌏 The effects of this on the dollar send distorsions to China. The Chinese yuan retreated from its strongest levels in over a year after the central bank set a weaker‑than‑expected midpoint for the sixth straight session, signaling caution about the currency’s rapid appreciation against the dollar.
🏭 New orders for U.S. factory goods increased less than expected in September, rising 0.2% after a downwardly revised 1.3% increase in August. Manufacturing, which accounts for about 10.1% of the U.S. economy, has been constrained by President Trump’s tariffs, though a surge in spending on artificial intelligence has propped up some industry segments.
🏗️ The UK construction sector contracted at the fastest pace since May 2020 in November, with steep declines across civil engineering, residential, and commercial building:
📉 The S&P Global/CIPS UK Construction PMI fell to 39.4 in November from 44.1 in October, extending the sector’s longest downturn since the global financial crisis. Residential construction activity was at its weakest since May 2020, when the COVID-19 pandemic halted building work. Commercial construction activity dropped at the sharpest pace in 5.5 years, with the subindex at 43.8.
🏘️ The U.K. Halifax House Price Index, on the other hand, published a couple of hours ago, shows us also depresion in the price of houses according to Halifax. Both indicators of more depressed activity than expected for the UK economy.
🏦 The Bank of England (BoE) is launching a stress test to assess how the $16 trillion global private equity and private credit industries would deal with a major financial shock. The BoE has secured participation from firms that make up around a third of Britain’s private-equity leveraged buyout activity, half of private credit in the UK corporate sector, and 40% of employment in private equity-funded businesses.
🔍 The test will focus on investment in large British businesses and how the investors finance themselves, as well as any wider spillover to financial markets. The BoE has promised to share the findings of this stress test with international policymakers, as the Financial Stability Board Chair has identified private credit as a key area of focus for the G20.
🇩🇪 The German Economic Institute IW forecasts that Germany’s economic recovery will remain subdued next year. Germany’s real GDP is expected to grow only slightly this year, by 0.1%, before hitting 0.9% growth in 2026.
📆 However, about a third of this 2026 growth will be due to a calendar effect, with nearly 2.5 more working days available compared to 2025. The German government had previously revised up its 2025 GDP forecast to 0.2% growth, and expects 1.3% growth in 2026. Consumer spending is expected to remain below potential, despite inflation stabilizing around 2%, as employment prospects remain muted.
🌐 Geopolitical tensions are weighing on global trade, which is expected to grow by only 1.5% in 2026 after a 4.5% increase in 2025.
🇯🇵 The BOJ looks set to proceed with a hike in its policy rate to 0.75% from 0.5%, which was flagged by Governor Kazuo Ueda in a speech on Monday. The government’s stance is that if the BOJ wants to raise rates this month, it should make its own decision, and the administration is prepared to tolerate a December hike.
🤝 Finance Minister Satsuki Katayama said she sees no gap between the government and the BOJ on their assessment of the economy, and even reflationist aides of Prime Minister Sanae Takaichi have not expressed opposition to a December hike.
📈 The benchmark 10-year Japanese government bond yield hit an 18-year high of 1.930% after the report, reflecting market expectations of the rate hike.
⚠️ BUT, remember that the BoJ has played in the past a cunning and risky practice of leaving the exchange rates unchanged by betting that the Fed will move its own, leaving the yen strengthened without having to take further measures on the BoJ.
🇮🇳 The Reserve Bank of India (RBI) has cut its key repo rate by 25 basis points to 5.25% and left the door open for further easing, while also taking steps to boost banking-sector liquidity by up to $16 billion. The RBI’s monetary policy committee voted unanimously to lower the repo rate and maintain a “neutral” stance, suggesting room for further rate cuts. The central bank has now cut rates by a total of 125 basis points since February 2025, the most aggressive easing since 2019.
💱 The RBI also decided to conduct open market operations of 1 trillion rupees ($11.14 billion) to buy bonds this month, and another $5 billion in forex swaps to add liquidity to the banking system. This choice supports the Indian economy through a combination of monetary easing and liquidity measures, while maintaining a flexible approach to the exchange rate.
📊 The central bank raised its GDP forecast for the current year to 7.3% from 6.8% and lowered its inflation projection to 2% from 2.6%.
🔋 As we mentioned over a month ago regarding how the energy shortage for data centers could be addressed through micro‑nuclear reactors like those proposed by Rolls‑Royce, Nvidia CEO Jensen Huang has now echoed the same idea during a Joe Rogan’s interview. He said: “In the next 6–7 years you’re going to see a bunch of small nuclear reactors… we will ALL be power generators, just like somebody’s farm.”
Geopolitics.
🤝 The meeting between Chinese President Xi Jinping and French President Emmanuel Macron in Beijing yesterday covered several important topics. China said it was open to importing more goods from France in exchange for a “fair, conducive environment” for Chinese businesses in France. The two countries will work toward establishing a framework for increased Chinese direct investment in Europe, particularly in France. Macron also urged China to pressure Russia to adopt the European position on the Ukraine conflict; the EU has been left out of the negotiations between the US and Russia.
🗳️ Polymarket forecasts show a 64% probability that Trump will not attack Venezuela by year‑end, despite his announcement yesterday that such an attack could happen soon.
📺 Marco Rubio now says in a Fox’s news interview that Trump’s push to attack Venezuela is driven by claims that Hezbollah and Iran are operating in the country.
🛢️ Factores de riesgo para el mercado del crudo. The expected Federal Reserve interest rate cut would stimulate economic growth and oil demand. Escalating tensions between the U.S. and Venezuela could put Venezuela’s 1.1 million barrels per day of crude oil production at risk. The stalled peace talks in Moscow, which failed to achieve any significant breakthroughs over the war in Ukraine. A potential peace deal with Russia could bring more barrels to the market and push prices down.
🛢️ OPEC+ has agreed to keep production steady until early next year, which provides some support for prices. Saudi Arabia had cut its January Arab Light crude selling prices to Asia to the lowest level in five years amid oversupply.
Market view.
📊 Markets continue to edge higher, maintaining a modest yet steady upward trend. Mini S&P 500 futures are trading above 6,880 points, while Nasdaq 100 futures have moved past 25,730 points.
Today’s session — and the upcoming US PCE data — will be decisive in determining whether markets can end the week on a strong note.
💵 The US Dollar Index (DXY) has broken below the key 99 support, allowing other currencies to gain ground against the dollar. EUR/USD climbed to 1.1680 before quickly pulling back to the current 1.1660.
🇪🇺 In Europe, DAX 40 futures are attempting to break above 24,000 points, while Euro Stoxx 50 futures are trying to clear the 5,750‑point barrier.
🛢️ Crude oil remains in a tight range, with little movement as traders await updates on the situation in Ukraine and developments in the Venezuela conflict. Spot Brent currently trades around $63.20.
🥇 Gold futures continue to show strength, trading near $4,255 per ounce.
₿ Bitcoin finally broke through the $92,000 level during yesterday’s session, reaching as high as $94,000, before pulling back towards $92,300 — likely a standard pullback following the breakout
