November’s silver lining

Futures prices now indicate a roughly 90% chance of a rate cut next month, having been below 30% last week. The prospect of a successful peace treaty between Russia and Ukraine also added to market optimism, helping global equities to post strong gains for the week.

The tech sector rebounded having fallen sharply in the week previous, and of the Magnificent Seven, only Nvidia failed to finish in the green.

In the US, the Conference Board’s consumer confidence index fell 6.8 points to 88.7, the lowest it’s been in seven months and below projections of 93.2. Retail sales in September grew 0.2% MoM, missing expectations for 0.4%. However, Mastercard have reported that US Black Friday spending was up 4.1% YoY, which bodes well for the holiday season.

Markets had a somewhat muted reaction to the UK’s 2025 budget, with gilt yields falling moderately. This was partly since most of the details were accidentally leaked beforehand. The budget introduced several tax increases, which is expected to raise government revenues by £26 billion.

In the Eurozone, German CPI inflation remained at 2.3% in November, below projections of 2.4%.  Elsewhere, in Japan retail sales and industrial production both improved in October while the unemployment rate remained at 2.6%. However, core CPI inflation in Tokyo rose 2.8% YoY, above expectations of 2.7%. This combination added to the hawkish sentiment and the likelihood of a rate hike in December.

Meanwhile, the Bank of Korea decided to hold rates at 2.5% amid concerns around accelerating inflation.  Gold rose 3.5% and silver soared 12.1% in EUR terms as rate expectations softened in the US.

Equities

Global stocks finished up 2.8% in euro terms and up 3.7% in local terms last week. Year-to-date global markets are up by 7.2% in euro terms and up by 20.1% in local terms. The US market, the largest in the world, finished up at 2.8% in euro terms and up at 3.8% in local terms.

Fixed Income & FX

The US 10-year yield finished at 4.0% last week. The German equivalent finished at 2.7%. The Irish 10-year bond yield finished at 2.9%. The Euro/US Dollar exchange rate finished at 1.16, whilst Euro/GBP finished at 0.88.

Commodities

Oil finished the week at $59 per barrel and is down -27.1% year-to date in euro terms. Gold finished the week at $4,239 per troy ounce and is up 44.2% year-to-date in euro terms. Copper finished the week at $11,234 per tonne and is up 15.9% year-to-date in euro terms.

The week ahead

Monday 1^st December

US ISM manufacturing PMI for November Is reported.

Tuesday 2^nd December

Eurozone flash inflation for November goes to print.

Thursday 4^th December

UK construction PMI for November is released.