📆 Friday, December 20
► European stock futures are trading lower, with Euro Stoxx 600 contracts falling nearly 1%. This mirrors the cautious tone in global markets, as investors brace for the release of the U.S. PCE inflation data, a key indicator for Federal Reserve policy. The recent hawkish shift by the Fed has intensified concerns about tighter monetary conditions in 2025, especially after Thursday’s strong US GDP and consumer spending data. Meanwhile, U.K. retail sales figures disappointed, rising just 0.2% in November compared to the expected 0.5%, signaling continued consumer strain amid elevated inflation and high interest rates.
► US stock extended profit taking, with Dow, S&P 500, and Nasdaq trading 0.5% – 0.8% lower as traders await the Fed’s preferred inflation gauge. The hawkish pivot from the Fed earlier this week has tempered market optimism, with Treasury yields holding steady at 4.57% – a six-month high – following Thursday’s gains. Currently, yields have stabilized and traded even slightly (1.5 bps) lower in US pre-market trading. The DYX reached new highs (or two-year highs) on expectations of tighter policy and better economic data, but is currently down 0.15% in European trading. Investors are also grappling with uncertainty over a looming U.S. government shutdown, as a Republican-led House rejected a funding proposal backed by President-elect Trump, raising fears of political gridlock in the months ahead.
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