Macro-News round-up:

#MarketNews

  • In the UK, a top central banker stressed that monetary policy would need to be restrictive for an extended period to combat inflation.

    Despite sluggish sales, UK retailers are feeling slightly more optimistic, according to the Confederation of British Industry (CBI).

  • Meanwhile, US economists from Deutsche Bank predict that the Federal Reserve will cut interest rates by 175 basis points next year due to a looming recession.

    The US job market is showing signs of softening, which may threaten the gains made by minority groups in the workforce.

    The US dollar continues to weaken, causing yields on 10-year and 2-year bonds to fall. The euro rose slightly above 1.0950 against the dollar.

    Higher mortgage rates are affecting new home sales in the US, which dropped in October.
  • ¬∑China’s central bank has pledged to support domestic demand in the country’s economy. The People’s Bank of China has pledged to support domestic demand in the country’s economy.
  • In Central Europe, rate-setters are facing political pressure to maintain accommodative monetary policies, Countries like Hungary or Poland (non-eurozone), would have their respective monetary policymakers, under political pressure, favoring the current government with accommodative policies of low interest rates, similar to what was seen in the US during the Trump administration.
  • Oil prices fell due to reduced geopolitical risk premium, following the release of hostages in Gaza, and OPEC+ is nearing a compromise with African oil producers on 2024 output levels. However, China’s long-term outlook for oil demand growth is lukewarm, and it may weaken to about 4% in the first half of 2024 due to the property sector crunch affecting diesel use.
  • Gold prices rose slightly in Asian trade, maintaining a six-month high, as investors increasingly bet that the Federal Reserve will pause interest rate hikes.

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