The tradition of central banks hosting meetings just before Christmas continued this year with policy decisions in the US, Japan, UK, Norway, and Sweden. The largest present came from the US Federal Reserve in the shape of a significant hawkish surprise. Fed cut the policy rate target by 25bp to 4.25-4.50% as expected, but Powell delivered […]

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Markets A looming US government shutdown starting as soon as tonight is capturing market and media attention. Policymakers had agreed on a bipartisan deal to fund spending through March 24. Enter Trump and Musk. Both urged Republicans to kill the deal, a.o. because it didn’t raise the debt ceiling. Trump otherwise has to address the […]

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The forex and stock markets are holding steady today, with limited volatility as traders anticipate FOMC rate decision and updated economic projections. A 25bps rate cut, reducing the target range to 4.25–4.50%, is virtually certain. However, the market’s focus lies on the tone and guidance Fed delivers. Critical questions include whether a pause in easing […]

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Eurozone headline inflation for November was finalized at 2.2% yoy, up from October’s 2.0%. Meanwhile, Core CPI, which excludes food, alcohol, and tobacco, eased to 2.7% yoy, down from October’s 2.9%. Services contributed the most to the Eurozone annual inflation rate, adding +1.74 percentage points, followed by food, alcohol, and tobacco (+0.53 pp) and non-energy […]

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Canada joined the global political gloom. The sudden resignation of the finance minister on Monday started raising questions about Trudeau’s leadership as politicians there try to find ways to deal with economic slowdown topped by Trump’s tariff threats. Happily for the Bank of Canada (BoC), inflation dropped below the 2% target for the second time […]

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Markets Yesterday’s PMI releases in Europe and the US confirmed the ongoing divergence in growth on both sides of the Atlantic, cementing market expectations on similar divergence in Fed and ECB policy. The S&P global US flash PMI showed output growth at the end of the year at a 33-month high (56.6 from 54.9) amid […]

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Europe appears to be coming apart one nation at a time’, writes Bloomberg to summarize the complicated politics of the old continent. After the French snap election led to a divided government and an ungovernable France since summer, German politicians gave a no-confidence verdict for the three-way ruling party of Germany, paving the way for […]

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Markets Slightly better-than-expected December EMU PMI’s showed business activity decreasing for the second month running. The rate of contraction was slower than in November though (49.5 from 48.3). A modest return to growth of services (51.4 from 49.5) was unable to erase the continuing downturn in manufacturing (45.2; unchanged). As has now been the case […]

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The forex market began the week on a subdued note, with mild risk-off sentiment setting the tone. China’s latest economic data painted a bleak picture, with retail sales significantly underperforming expectations and fixed asset investment experiencing a deeper decline. While industrial production growth met forecasts, it failed to offset concerns about the broader economic slowdown. […]

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In focus today Today all eyes are on the euro area December flash PMIs as the very large decline in November caused significant market moves. There was nothing positive in the November report where the services PMI fell below 50 to 49.5 for the first time since January, and the manufacturing PMI remained stuck at […]

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Markets European yields and the euro today gained minor further ground after succeeding an intraday reversal yesterday after the ECB 25 bps cut (to 3.0%). First post-meeting comments from ECB policy makers confirmed that more easing will follow. Internal debate on the pace (Kazaks still keeps the door open for a bigger step) and the […]

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The Euro rebounded broadly today, buoyed by reassurances from a number of ECB officials that the central bank remains committed to a gradual approach to policy easing. Yesterday’s 25bps rate cut appears to have had solid consensus backing, with no indications that a more aggressive 50bps cut was even seriously debated. Despite recent economic softness […]

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Eurozone industrial production stagnated in October, recording 0.0% mom growth, in line with expectations. The data reflects mixed performance across sectors. While output for capital goods rose by 1.7%, intermediate goods production remained unchanged. On the downside, energy production dropped sharply by -1.9%, while durable and non-durable consumer goods contracted by -1.8% and -2.3%, respectively,. […]

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Markets German Bunds outperformed US Treasuries and UK Gilts yesterday as we approach final policy meetings of respective central banks which are set to widen their diverging views. The ECB will on Thursday conduct a third consecutive (and 4th in total) 25 bps rate cut. A possibly slightly lower GDP and CPI outlook is covered […]

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Investor sentiment in the Eurozone deteriorated sharply in December, with the Sentix Investor Confidence Index dropping to -17.5 from -12.8, significantly below expectations of -13.1. This marks the weakest reading since November 2023. Current Situation Index fell to -28.5, the lowest since November 2022, while Expectations Index slipped to -5.8 from -3.8. . Germany remains […]

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Markets US November payrolls cemented the case for a 25 bps rate cut by the Fed. That scenario wasn’t completely discounted (70%) ahead of the numbers. While headline payrolls growth rebounded to 227k (with an additional 56k upward revision to September & October figures), the accompanying household survey made a more grim reading. With a […]

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Summary United States: The Song Remains the Same Incoming economic data continue to illuminate pockets of stress in the U.S. economy. The unwinding of strikes and hurricane effects lifted nonfarm payrolls by 227K in November; however, job gains remain highly concentrated by industry. Openings also continue to trend lower through the month volatility. Meanwhile, tariff-related […]

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This week, we published our macroeconomic projections for the global economy and the Nordics. In the euro area, we expect growth to slowly increase during 2025, but the near-term outlook is weak. We expect some cooling in the US, but steady economic growth to continue despite fiscal and trade policy uncertainties. China continues to struggle with the heavy […]

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Markets Rassemblement National’s Le Pen in interview with Bloomberg caused a sigh of relief across markets. After supporting the motion of no confidence that brought down the Barnier government, she’s opened up to any new Prime Minister as long as he/she presents a budget that pencils in a “reasonable trajectory” to bring down outsized deficits. […]

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Against all odds, yesterday ended up being a good day – at least for investors who have exposure to the French assets. The French government fell and the political uncertainty shifted to a higher gear yet, the French 10-year yield eased, the euro gained, and the CAC 40 hasn’t had such a good week since […]

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