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Review 27Nov - 01Dec23 - Stocks, Bonds and Gold higher, while the USD traded mixed

Key events of last week:

  • The Flash November CPI YoY for the Euro Area surprisingly fell to 2.4%, drawing attention to the ECB's 2% target. Post-release, expectations for ECB rate cuts surged, with markets pricing in more than four cuts for 2024.

  • In China, the Caixin PMI outperformed expectations with a reading of 50.7, contrasting with the official NBS PMI, which remained below 50 for the second consecutive month (refer to our note on China).

  • GDP growth in France and Canada turned unexpectedly negative in Q3, as high interest rates began to significantly hinder growth.

  • In contrast, US GDP growth for Q3 was revised upwards to 5.2% QoQ annualized; however, the underlying details were less robust (real GDI was only 1.5% QoQ annualized, see our note).

  • Fed Governor Waller triggered a rally in rates and equities on Tuesday by suggesting the possibility of rate cuts 'if inflation remains low for a few months.' On Friday, Powell did not counter this sentiment, raising the question: Is the Fed content with looser financial conditions?

  • OPEC+ as a group did not announce new cuts, merely extending the previous cuts from October 2022, leading to a sharp decline in oil prices as traders expressed their disappointment.

  • Chicago PMI surprised to the upside at 55.8 but was not confirmed by US ISM which came in unchanged at 46.7 and lower than expected


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