Equity markets ended last week on a mixed note. Questions about the continuation of an accommodative monetary policy by the Fed in 2025 weighed on the trend.
Bond yields have risen again. The American 10-year rate has exceeded the level of 4.35% while the German 10-year rate has returned to the level of 2.25%.
In France, the appointment of a new prime minister did not make it possible to reduce the spread with Germany, which remained stable at nearly 80 basis points.
In the United States, supported by economic activity which remains solid, consumer prices reaccelerated slightly in November. Thus, the consumer price index (CPI) increased by 2.7% over one year in November after an increase of 2.6% in October.
Producer prices, for their part, increased by 0.4% in November compared to the previous month, and by 0.1% excluding food, energy and commercial services.
The European Central Bank leaves the door open to further easing
In this context, the entry into office of President Trump in January for his second term, and the first announcements of his trade policy, particularly vis-à-vis China, will be crucial in judging the continuation of monetary easing. of the American institution.
In Europe, faced with a deterioration in economic activity, the European Central Bank (ECB) reduced its interest rates for the fourth time since the start of the year and left the door open to further easing while inflation is moving closer to its target and the economy remains depressed.
The deposit rate thus increases to 3.0% after having climbed to 4% after ten consecutive increases between July 2022 and September 2023, its highest level since the creation of the euro in 1999.
The SNB lowers its key rate
The ECB also confirmed on Thursday that it would stop buying bonds this month as part of its emergency purchase program put in place during the COVID-19 pandemic.
The SNB, for its part, created a surprise by lowering its key rate by 50 basis points. Indeed, since the last review of the economic and monetary situation, inflationary pressures have once again fallen more than expected in Switzerland.
In China, the publication of disappointing economic activity indicators did not allow the indices to continue to rebound even though the authorities have expressed their desire to revive economic growth.
In this context, the S&P 500 index lost 0.64%, the Nasdaq increased by 0.34% and the Stoxx Europe 600 lost 0.77%.
This week, the Fed meeting and the prospects for rate cuts will therefore be particularly scrutinized.
The essentials in brief
