Today’s focus is on the German ZEW indicator for November, as it will be the only economic data released. It will be interesting to see if the positive trend in expectations seen in October will continue this month.
Looking at the economic and market news from yesterday, we see various developments. In Sweden, the unemployment rate increased to 6.9%, indicating a weak labor market. In Denmark, inflation rose to 1.6% y/y in October, driven by higher electricity prices. However, underlying price pressure remains modest. In Norway, core inflation dropped slightly in October, but it was in line with market expectations. The Norges Bank is not expected to cut rates until March 2025, given the current economic conditions.
In China, credit data showed some improvement in October, but overall data remains soft. Money supply growth also rebounded, but the impact of expected tariff hikes on Chinese products remains a big uncertainty. In Japan, the Lower House re-elected PM Ishiba, despite his coalition losing its majority. The stance on monetary policy is still uncertain.
Oil prices fell almost 3% due to various factors such as China’s stimulus plan, a stronger USD, and expectations of increased supply. In the crypto space, Bitcoin continued to rise, reaching around USD 88,600.
Global equities were higher yesterday, with cyclicals performing well. However, Tesla’s post-election rally may face risks if a tariff war ensues. In the US, major indices saw gains, while markets in Asia are lower today. European government bond yields declined, and the US bond market saw a modest rise in yields this morning.
In the FX market, limited activity was seen due to the US holiday, with EUR/USD holding below 1.07. The EUR was one of the biggest losers yesterday, while the Brent oil price fell close to 3%. NOK/SEK barely moved in response.
Overall, the economic landscape continues to show mixed signals, with uncertainty looming over various geopolitical and economic factors. Investors are keeping a close eye on developments to navigate through these challenging times.
