📆 Thursday, November 7
► European futures rallied on strong gains in New York following post-election optimism, boosted by the clear victory of Trump that does not require a lengthy recount, as well as expectations of a Fed rate cut later today. Investors are weighing the potential impact of US fiscal policy on inflation. Germany reported a trade surplus of €17 billion in September, which was lower than expected. The DAX index also rose after German Chancellor Scholz announced the break-up of the unpopular and constantly feuding ruling coalition. Investors are also watching the Bank of England's interest rate decision later today, where a rate cut to 4.75% is expected. Eurozone retail sales came in significantly better-than-expected (at 2.9% YoY vs. 1.3% expected) also providing some tailwinds to European stock market futures.
► US equities rose sharply, led by small caps and financial stocks hoping for an easing of regulation under Trump's presidency. The S&P 500 rose by 2.5%, the best performance in history following a US election. Currently, Nasdaq futures are up 0.15%, while S&P 500 futures are unchanged. Futures for the Russell 2000 Index rose by almost 6%, with tech and industrial stocks also gaining in anticipation of domestic market-led growth. Government bond yields rose 15 basis points as markets braced for possible inflation due to Trump's tax plans. Markets are now awaiting the Fed's interest rate decision later today, which is expected to cut rates further to 4.75%.
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