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Major economic data and central bank decisions will dominate last full trading week

This week, more monetary policy decisions will take the spotlight as the Bank of England is expected to cut interest rates, while the Bank of Japan might be ready to tighten. In a dense calendar of data US non-farm payrolls and retail sales will shed light on the strength of the US economy and the inflation outlook in the US, the euro area and UK. Additionally, purchasing managers’ surveys will offer fresh insight into global growth momentum at the end of the year. Meanwhile, US stocks retreated on Friday with the Nasdaq Composite dropping 1.7% as investors continued to rotate from AI-related tech shares. 

  • Data
  • Autore Alessandro Fezzi, Content & Publications
  • Tempo di lettura 5 minuto

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US equities declined on Friday as investors continued to take profits in artificial intelligence-related technology stocks and shift into value and cyclical names, following the Federal Reserve’s third interest rate cut this year on Wednesday. The S&P 500 fell 1.1% to 6827.41 and the Nasdaq Composite dropped 1.7% to 23,195.17, while the Dow Jones Industrial Average slipped 0.5% to 48,458.05 after touching a fresh intraday record; the small-cap benchmark Russell 2000 lost 1.5% to 2551.46 but remained near new highs. Chipmaker Broadcom slumped more than 11% amid concerns about margin pressure despite beating fourth-quarter expectations and guiding for current-quarter revenue of USD 19.1 billion with AI chip sales set to double, dragging down other AI-linked names such as AMD, Palantir Technologies and Micron. 

Asia-Pacific stocks fall as China economic data disappoints

Equity markets in the Asia-Pacific region declined on Monday as investors digested weaker-than-expected economic indicators from China and followed a pullback in US technology shares on Friday. South Korea’s Kospi dropped 2.2% with major chipmakers SK Hynix and Samsung Electronics losing more than 4% and 3%, respectively, while Japan’s Nikkei 225 fell around 1.3% and Australia’s S&P/ASX 200 slipped about 0.7%. Chinese data for November showed retail sales rising 1.3% year-on-year, down from 2.9% in the previous month and well below economists’ projections, while industrial production growth eased slightly to 4.8% from 4.9%. Japan’s latest Tankan survey from the Bank of Japan indicated improving business sentiment, with the large manufacturers index edging up to +15 in the fourth quarter, its strongest level in four years, and the non-manufacturing index at +34.

China introduces export controls on steel

China’s Ministry of Commerce announced on Friday that export controls on about 300 steel products will take effect from the beginning of next year, requiring Chinese companies to obtain licences before shipping these items abroad. Officials did not provide a formal justification, although the move comes amid international criticism of cheap, subsidised Chinese steel and structural overcapacity in the sector. The China Iron and Steel Association described the step as an important tool to manage exports, support industry development and help maintain a better global balance between supply and demand. Despite foreign protective measures such as US tariffs, China’s steel exports in the year to November already exceeded 100 million tonnes, up 6.7% from the same period a year earlier, prompting concerns in countries such as Germany about pressure on domestic producers.

German inflation remains above ECB target

Consumer prices in Germany increased by 2.3% year-on-year in November, unchanged from October and marking the fourth consecutive month above the ECB’s 2% objective. The main driver remained services, where prices rose 3.5% compared with a year earlier, reflecting staff shortages and higher wages, with domestic package holidays up 12% and rail fares rising 11.9%. Core inflation excluding food and energy edged down from 2.8% to 2.7%. In France, inflation remained comparatively low. Harmonised consumer prices in France rose 0.8% year-on-year in November, matching October’s rate and confirming the preliminary estimate. 

Corporate and economic calendar

Corporate data in focus: There is no major corporate news scheduled today.

Economic data in focus: SECO Swiss economic forecast (07:30), Swiss Producer and Import Price Index (07:30), Sentix investor confidence for the eurozone (11:00), German industrial production (11:00), Bundesbank monthly report (12:00), Canadian Consumer Price Index (14:30), Empire State Manufacturing Index (14:30).

 

 

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.