Trump’s policy showed some fragility yesterday: his bill was rejected in the House and the United States could thus enter a shutdown late at night today. The winner above all is the dollar which has stolen gold’s role as a safe haven asset. European stock markets seen falling on the day of the four witches
Caution prevails close to the last significant macroeconomic data of the week Pcethe inflation indicator used as a reference by the Federal Reserve which could alleviate or aggravate fears about strong pressure on prices. But investors are starting to see some fragility in Trump’s policies: lo US government shutdown it will come into force tonight if a solution is not found in the next few hours. The Asian bags have reached a new three-month low, while the dollar reached the highest levels of the last two years. European markets are set for a lower opening.
The most closely watched U.S. inflation gauge, Core Personal Consumption Expenditures, is due later today. Forecasts are centered on a 0.2% monthly increase for November and any upside surprise could cause markets to further reduce bets on an easing of US monetary policy next year.
Trump’s policy is starting to show fragility: will there be a government shutdown today?
Investors are also expressing concern that even some Republicans not seeming to be great supporters of the grown-ups President-elect Donald Trump’s spending planswith the US government facing a shutdown. In fact, during the night it fell in the House and bill supported by Trumpwhich would have allowed the government to refinance for three months and suspend the debt ceiling for two years: 38 Republicans voted against the bill, joining the Democrats in dropping the proposal. The United States could thus enter shoutdown late today. The debate laid bare fault lines in Trump’s Republican Party that could resurface next year. The policies proposed by Trump of tariffs, tax cuts and big spending are part of the reason the Fed has become cautious about easing policy next year. Markets now see fewer than two rate cuts next year at a terminal rate of 3.9%, much higher than a few months ago.
US Treasury yields continue to rise: above the key level of 4.50%
This prospect has had a heavy impact on the video market Treasury securitieswhere benchmark 10-year bond yields have jumped 40 basis points over the past two weeks, 70 basis points this year and 16 basis points this week, surpassing a key level of 4.5%. Treasuries seem so destined for a fourth consecutive year of losses. “It is clear how worried central banks are about geopolitics and uncertainty in 2025,” he told Reuters James Rossiter, head of global macroeconomic strategy at TD Securities. “Ultimately, uncertainty will remain high, political shocks will be significant, and markets will likely experience more changes than in the recent past. 2025 will be a year to remember.”
Wall Street closes at the previous levels
Stocks in the United States changed little compared to the previous session. The Dow Jones stops at 42,342 points and the S&P-500 also remains at the starting line at 5,867 points. The Nasdaq 100 is just below parity (-0.47%); on parity the S&P 100 (+0.11%). The utilities sector stands out in the S&P 500 basket. Among the worst in the S&P 500 basket list, the materials sectors (-1.08%), energy (-0.99%) and office consumer goods fell the most (-0.74%).
Asian stocks mixed
In AsiaMSCI’s index of Asia-Pacific shares outside Japan fell 0.6% today, hitting a new three-month low and on track for a 3% weekly decline. Nikkei of Japan remained flat but down 1.7% for the week. It rose 16% for the year, partly due to the weakness of the yen, which has depreciated 12% in 2024 and drawn constant warnings of intervention from Japanese authorities. Friday’s data showed that underlying inflation in Japan accelerated in November, but swaps continued to lean towards a BOJ pause in January. Both Chinese blue chips and the Hang Seng’s Hong Kong increased by 0.2%. Today the People’s Bank of China left its key lending interest rates unchanged, in line with market expectations.
From the golden age to the dollar age. The euro is within sight of key support at $1.0331
Capping a eventful year of rate decisions, central banks in Britain, Japan, Norway and Australia kept rates steady, and Switzerland and Canada implemented 50 basis point cuts at their final meetings of the year. The Swedish Riksbank cut its key rate by 25 basis points, as did the European Central Bank last week.
All this causes the dollar remained in line with its main counterparts, reaching the highest level of the last two years at 108.43, benefiting from a certain advantage in interest rates.
It too yen it settled near a five-month low at 157.11 per dollar. It fell 1.7% overnight, as the Bank of Japan kept rates stable and Governor Kazuo Ueda struck a dovish tone saying it will take time to assess the wage outlook and the impact of policy Trump. The euro is down 1.4% on the week, to $1.0359, threatening a key support level of $1.0331. The Kospi index loses 1.6% and the local currency, won falls apart: the cross is at its lowest since 2009 at 1,450. According to reports, at these exchange levels, South Korea’s National Pension Service could be forced to sell up to almost $50 billion in foreign currency to cover losses. If the average closing exchange rate exceeds 1,450 for five business days, the NPS will implement strategic hedging, reports Bloomberg.
Also the market of raw material took a hit due to the strong US dollar. Friday prices petrolium fell, with US West Texas Intermediate falling 0.6% to $68.98 and 2.8% lower for the week. Prices are expected of gold will fall 2% this week, settling at $2,596 an ounce.
European stock markets seen falling on the day of the four witches
European stocks are seen opening lower based on EUROSTOXX 50 futures falling 0.75% in the so-called quadruple witching day or day of four witches: a term that refers to an important deadline, potentially capable of generating significant movements. In fact, they expire at the same time four types of derivative contracts: stock index futures, single stock futures, index options and single stock options.Nasdaq futures fell 0.6%, while S&P 500 futures fell 0.3%.
Unicredit. The German government will not subject a potential takeover of Commerzbank to an investment screening regardless of whether the German institution is considered critical infrastructure, a Berlin government source said. UniCredit’s investment in Commerzbank and bid on Banco BPM will test the eurozone’s commitment to greater integration, which is necessary to avoid economic decline. CEO Andrea Orcel says this in a speech on Financial Times.
Bpm Bank has reached an agreement with the unions which provides for the possibility for the bank to accept 1,100 requests for voluntary redundancy against 550 new hires.
Iveco. The IDV brand, specialized in defense and civil protection vehicles, has signed a contract with the Italian army for the supply of 1,453 tactical-logistic trucks with a total value of 755 million euros.
A2A. The Lombard multiutility said it had reached an agreement to sell part of its gas distribution network in northern Italy to Ascopiave.
Rai Way and Ei Towers. Major shareholders have signed a preliminary agreement to begin talks on a potential merger, setting an exclusivity period until September 30.
Maire brings together the extraordinary assembly on the strengthening of the increased voting system.
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