📆 Monday, November 20
► The Stoxx Europe 600 index opened with little change. Italian bond yields narrowed over German bonds as Moody's Investors Service upgraded Italy's debt outlook to stable, reducing fears of a downgrade. Italy's benchmark stock index showed modest gains in response. Germany’s producer price inflation showed a slight uptick to -0.10% in October from -0.20% in September 2023. Speeches by several European Central Bank officials scheduled for today are anticipated to shed light on the ECB's rate-hike cycle, adding to the broader market context.
► US equity futures are slightly up in pre-market trading (S&P 500 at +0.15%) but after the three-week stock rally, additional gains become increasingly limited. Speculation about the Federal Reserve nearing the end of its rate-hike cycle remain fully intact with swap markets currently pricing in about a 30% chance of a first Fed rate cut in March following cool inflation data. The rate cut speculations lead to the USD continuing its decline, reaching the lowest level since August. Treasury yields saw a marginal increase ahead of a US 20-year bond auction. Investors are now keenly awaiting the minutes from the last Fed rates meeting (Nov 21) for more clarity on policymakers' stance.
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