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Central bank decisions in focus

Today, a series of monetary policy decisions will take centre stage: the European Central Bank (ECB), Swedish Riksbank and Norway’s Norges Bank are all expected to hold rates unchanged, while the Bank of England is poised to cut key rates amid slower inflation. Stock indices in the US and Asia slipped as AI worries weigh. Looking at Europe, latest Ifo survey results showed that German corporates are more pessimistic going into 2026. 

  • Date
  • Author Alessandro Fezzi, Content & Publications
  • Reading time 5 minutes

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Stock indices in New York retreated on Wednesday as concerns about stretched valuations in artificial intelligence-related shares prompted profit-taking, with AI infrastructure and energy names among the main losers. The Dow Jones Industrial Average fell around 0.5% to 47,885.97 points, the broad S&P 500 declined 1.2% to 6721.43 points and the technology-heavy Nasdaq 100 dropped almost 2% to 24,647.61 points, though the latter still shows a gain of about 17% since the start of the year. Shares in software group Oracle slid almost 5.5% after a report that investment firm Blue Owl Capital would not back a USD 10 billion data center project. Amazon eased slightly amid reports it is exploring at least USD 10 billion of investment in ChatGPT developer OpenAI.

Asia-Pacific stocks fall on tech rotation

Equity markets in the Asia-Pacific region weakened on Thursday as investors extended a shift from technology shares following declines on Wall Street. Artificial intelligence-related stocks came under pressure after a major investor in US software group Oracle reportedly withdrew funding for a data centre project, dragging names such as Broadcom, Nvidia and Advanced Micro Devices lower. In Japan, the Nikkei 225 dropped around 1.5% with technology conglomerate SoftBank Group and semiconductor equipment makers among the main laggards, ahead of a Bank of Japan meeting where policymakers are expected to lift interest rates to 0.75%, the highest level in about three decades, on Friday. South Korea’s Kospi and Australia’s S&P/ASX 200 also slipped, while Hong Kong’s Hang Seng index opened lower as investors looked ahead to US inflation data for November due later today.

German business sentiment deteriorates further

Business confidence in Germany weakened again in December, with the Ifo business climate index falling to 87.6 points from 88 points in November, contrary to economists’ expectations for a slight improvement to around 88.2, according to survey results released on Wednesday. The expectations indicator deteriorated noticeably, while the assessment of the current situation remained unchanged, the Munich-based Ifo Institute reported. Ifo President Clemens Fuest said companies have become more pessimistic about the first half of 2026 and noted that the year is ending without any sense of renewed momentum, based on the institute’s monthly survey of around 9000 firms.

Major European equity indices edged lower on Wednesday as investors positioned for interest rate decisions and reacted to losses in US technology shares. The euro area’s EuroStoxx 50 fell 0.6%, remaining up 16% for the year and finding support near key 50-day moving average, while Switzerland’s SMI dipped 0.2% but is still more than 12% higher in 2025. 

UK inflation drops, boosting rate cut hopes

Consumer prices in the United Kingdom slowed dramatically to 3.2% in November, down from 3.6% in October, falling below economists’ forecasts, increasing the likelihood of a Bank of England interest rate cut this afternoon (13:00 MEZ). Core inflation also eased to 3.2% from 3.4%, with lower food prices as well as softer tobacco and women’s clothing prices cited by the Office for National Statistics as key drivers. 

Corporate and economic calendar

Corporate data in focus: Nike and FedEx will publish quarterly reports.

Economic data in focus: Swiss trade balance (08:00), Bank of England interest rate decision (13:00), European Central Bank interest rate decision (14:15), US Consumer Price Index, US weekly initial jobless claims, and Philly Fed Manufacturing Index (14:30).

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Global economic and market trends at a glance

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