Market Report.
🛠️ Yesterday, US jobless claims remained high at 1.908 million this week. Above the forecast of 1.88 million, they show a slow recovery in the labour market.
🌍 EU member states are urging the European Commission to urgently engage with Donald Trump’s transition team to prevent potential disruption and worsen tensions with the US. EU trade ministers are discussing preparations for Trump’s protectionist agenda, including potential tariffs of 10-20%. The EU is exploring areas for increased cooperation with the US, such as US liquefied natural gas imports and closer alignment with US posture on China’s trade practices. The Commission is also developing potential retaliatory targets.
🔋 Swedish electric vehicle battery maker Northvolt has filed for Chapter 11 bankruptcy protection in the U.S., citing a “dire” liquidity situation with $5.8 billion in debts. The company faces production problems, a major customer loss, and lack of funding. Volkswagen, Northvolt’s top shareholder, is in close contact with the company but declined to comment on potential repercussions. The Swedish government supports the EV battery industry but has no plans to take a stake in Northvolt. The bankruptcy filing highlights European battery startups’ challenges in competing with Chinese companies.
📉 Early data in Europe shows a drop in UK retail sales, with a monthly contraction of -0.7% in October versus a forecast of -0.3%, leaving annualised retail sales at 2.4% versus the expected 3.4%.
📉 Additionally, Germany’s GDP growth rate slows. Growth of 0.2% was expected in the third quarter (Q3), but the result was 0.1%. The annualised figure reflects a contraction of the economy of -0.3% against the -0.2% estimated.
Market View:
📊 The opening of the European market keeps it timidly in positive territory. Yesterday, for the third time since last week, the DAX 40 lost 19,000 points. It is now trading at 19,222 points. The chart pattern is undoubtedly bearish, with falling highs and support at 19,000 points, which could end up being broken. The Eurostoxx 50 paints a very similar picture. Yesterday it reached 4,700 points and today it is bouncing timidly upwards to 4,775 points at the moment.
📈 US futures managed to rally yesterday on the back of US employment data, which showed some weakness in the labour market. The mini S&P 500 is currently trading at 5 971 points, moving a little closer to 6 000 points. The Nasdaq 100 also advanced and is approaching the 21,000-point area; it is currently at 20,815 points.
💵 The dollar regained ground and in the last few hours has surpassed 107 points on the DXY index, marking the highs of the year. The EUR/USD has lost the symbolic support zone at 1.05 and is now down to 1.0475.
🥇 Gold, which in yesterday’s report we announced had again conquered the important $2,650 per ounce zone, has continued to move higher towards $2,700 per ounce. War risks seem to be fuelling this move.
🛢️ We have seen slight rises in oil, with Brent crude oil reaching close to $74.50 per barrel.
💰 Bitcoin is on the verge of the $100,000 mark, a historic milestone. It is currently trading at $99,345, its all-time high so far.
Geopolitics:
💣 Yesterday, a Pentagon official claimed that Russia had warned the United States about the launch of a ballistic missile over Ukraine. The warning would have been made through US-Russian nuclear warning channels. However, neither Europe nor the rest of the world was informed.
📰 On the other hand, Russian Secretary of State Dmitry Peskov told the TASS news agency that they had been informed of the missile launch.
⚖️ The International Criminal Court’s decision to issue an arrest warrant for Israeli Prime Minister Benjamin Netanyahu for alleged war crimes in Gaza has left EU countries unsure on how to react. Although it is up to the individual governments, member nations are technically required to arrest him. While Hungary called the ICC’s action “shameful,” the Netherlands has stated that it will abide by ICC warrants.
📉 German Chancellor Olaf Scholz is set to run for a second term in snap elections, following the abolition of Defense Minister Boris Pistorius as a potential replacement. However, Scholz remains Germany’s most unpopular chancellor, with his Social Democratic Party (SPD) trailing in third place. Pistorius’ full support puts Scholz at a disadvantage against conservative candidate Friedrich Merz. The SPD is currently polling around 15% nationally, down over 10 points from the 2021 election and less than half the conservatives’ 33% support. The far-right AfD meanwhile is in second place at around 18%.
⚖️ France’s divided parliament is causing tensions between the National Front (RN) and the government. Barnier is suggesting using Article 49.3 of the constitution to pass the budget bill without a vote, potentially triggering a no-confidence vote that could lead to the government’s downfall. Meanwhile, Le Pen is threatening to vote no-confidence if the French purchasing power is threatened again. The RN is also supporting the far-left LFI party’s proposal to drop Macron’s pension reform.
