► European stocks are mixed after weak French data. The Stoxx 600 Index trades flat, but benefits from rising rate cut speculations after soft French economic data. The EUR weakened significantly further, exactly as predicted by our chief analyst Robert Lindner predicted (Our EUR/JPY is more than 120 (!) pips in profit). Yields for the German ten-year bund dropped further The inflation rate in France decreased to 3.4% in November from 4% in October, while French GDP contracted by 0.1% with inflation easing, fueling ECB rate cut expectations. Markets now show a 25 basis-point reduction in ECB rates is fully priced by April. Investors are now focused on the Eurozone inflation data, to be released later today (10:00 UTC+0).
► US equities futures remain steady ahead of several economic data releases. Treasuries paused after a significant November rally, with two-year Treasury yields falling to 4.67% / 10-y at 4.29%. The USD is facing its worst monthly performance in a year, signaling a shift in the Fed's hawkish stance. US Beige Book data highlighted a slowdown in economic activity, while GDP growth surged unexpectedly. Markets eagerly await the PCE inflation data for further market direction as well as Fed Chair Jerome Powell's Friday speech for clues on interest rate dynamics. Investors anticipate the release of the personal consumption expenditures (PCE) price index, expected to slow down, underlining the soft-landing narrative. However, our chief analyst expects that the likely stubborn inflation data will reduce Fed rate cut bets.
► Asian stocks displayed a mixed performance. Hong Kong shares rose slightly after experiencing losses in early trading, influenced by tech sector losses, while Australian stocks shone brightly, buoyed by cooling inflation. Japan's yen strengthened, indicating robust corporate demand. China’s manufacturing and services sectors contracted in November, raising concerns about growth. The market also observed Meituan's growth warning and Jack Ma's call for change at Alibaba Group.
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