Economies

The index pulls back from its recent record highs and tests key technical levels, amidst uncertainty around the central bank’s rate path and July’s general election

Price pressures eased substantially and close to the central bank’s 2% target, but were hotter than anticipated, sustaining uncertainty around the timing of the first rate cut

The central bank made another step towards lowering rates on Thursday, sending the stock market to new record highs, while today’s data showed the economy exited its recession

The German index is subdued as markets digest today’s data showing the economy shrunk last year, but prospects of an ECB pivot are supportive

The UK index rebounds from critical support today, as data showed GDP growth of 0.3% in November, but improving economic conditions could prolong the central banks restrictive stance

Core inflation for November printed at 4%y/y, which is unchanged, whilst headline inflation did moderate at 3.1% y/y (3.2%), albeit the pace of disinflation slowed from a month ago. The core month-on month reading was 0.3%, which equates to an annualised 3.66% - still higher than the Federal Reserve’s target of 2%. This combined with the higher than anticipated jobs data has put a dampener on the prospects of rate…

The FOMC statement is due to be released on Wednesday at 7:00pm GMT. The CME FedWatch Tool suggests an unchanged target rate at 5.25%-5.50%. Inflation is moderating and, although the NFP was higher than anticipated, the labour market does seem to be cooling. These all point at monetary policy being in restrictive territory, aiding in achieving the Fed’s 2% inflation target over the coming months. However, the market will be…

Friday’s jobs data was stronger than expected. The non-farm employment change printed at 199K, which was ahead of the 184K forecast. This resulted in a lower unemployment rate of 3.7% (3.9%), whilst average hourly earnings came in at 0.4% m/m, double last month’s 0.2% m/m.

China’s inflation contacted at the fastest pace in three years despite Beijing’s efforts to support domestic consumption, leading HKG33 to new 2023 lows

HKG33 faces pressure in a mixed month, after today’s Manufacturing PMI showed further contraction, highlighting China’s fragile economic state

The index is cautious after the UK Chancellor’s “Autumn Statement for Growth”, which could make the BoE’s struggle to control inflation harder