In the third quarter, Germany’s economy contracted slightly due to decreased consumer spending and the ongoing energy crisis. Q3 – 0.4% YoY (Exp. -0.3%)

However, German PMI data indicates that the country’s economic downturn has eased in November, signaling a potentially milder recession than previously anticipated. 

Additionally, French PMI data shows that French business activity has contracted again in November, with both manufacturing and services being negatively impacted.

In the Eurozone, business activity contracted at a slightly slower pace in November, but the outlook remains weak amid high inflation and rising interest rates. European government bond yields increased by about 6-7bp at the 10Y part of the curve, while 2Y European government bond yields rose by approximately 2-4bp.

In the UK, businesses experienced growth for the first time in three months, although higher interest rates and inflation continue to weigh on the economy. Despite these concerns, consumer confidence in the UK rose sharply in November.

In Japan, inflation accelerated to 3.3% YoY in October as compared to 3.0% in September and 3.4% market consensus, prompting speculation about an early end to the Bank of Japan’s ultra-easy monetary policy. 

To help households cope with rising costs and boost domestic investment, the government passed an extra budget worth around 13.1 trillion yen ($88 billion), despite concerns over the country’s worsening finances.

Efforts to curb price increases will continue in Japan with an extension of energy subsidies until next April, along with tax benefits for low-income households. In November, PMI data showed that Japan’s manufacturing activity contracted for the sixth consecutive month due to weak demand, supply chain disruptions, and rising input costs.

In commodity markets, Russia is increasing its fuel oil exports to Asia and utilizing ship-to-ship transfers to build larger cargoes for distant markets. 

In response to US sanctions on shipping firms carrying Russian oil, three major Greek shipping companies have stopped transporting Russian oil, which may impact the oil export from Russia’s European ports of Primorsk, Ust-Luga and Novorossiisk.