ASIA:
In November, foreign investors significantly increased their bond purchases in key Asian markets due to a notable decline in U.S. Treasury yields and a shift in expectations for potential Federal Reserve rate cuts. They made their largest monthly net purchase since May, buying a total of $6.36 billion in South Korean, Indian, Malaysian, Indonesian, and Thai bonds. The surge in Asian bond purchases coincided with a sharp fall in U.S. Treasury yields, triggered by less hawkish remarks from Federal Reserve officials and cooler-than-expected October inflation data. The market began anticipating potential Fed rate cuts as early as March 2024. Indian bonds, in particular, attracted $1.78 billion in foreign capital, the highest inflow since August 2017, driven by optimistic economic growth forecasts and the inclusion of local bonds in JP Morgan’s emerging market debt index next year.
A survey by the Monetary Authority of Singapore indicates that Singapore’s GDP growth for 2024 is expected to be lower than previously projected. The survey, based on responses from 25 economists and analysts, forecasts a growth rate of 2.3%, down from the 2.5% estimated in September. The economists also anticipate a decline in headline and core inflation in 2024, with figures expected to be 3.4% and 3%, respectively, compared to the current year. In addition, the survey suggests a slight increase in inflation for 2023, with an estimate of 4.8%, and the outlook for MAS core inflation remains unchanged at 4.1%.
The major Asian stock markets had a mixed day today:
The major Asian currency markets had a mixed day today:
The above data was collected around 15:57 EST.
Precious Metals:
The above data was collected around 16:00 EST.
EUROPE/EMEA:
Germany’s recently formed coalition pact, aimed at addressing a legal setback to its budget plans, relies predominantly on spending cuts that are expected to further weigh on the already sluggish growth of Europe’s largest economy, according to economists. Finance Minister Christian Lindner, an advocate of fiscal discipline, has pushed for the reinstatement of a cap on new net borrowing in 2024 and filling funding gaps totaling 17 billion euros ($18 billion) through cost savings. The European Central Bank’s restrictive monetary policy to control inflation, coupled with uncertainty about the implications of the recent budget deal, raises the risk of prolonging a shallow recession. The German economy has faced challenges this year, including high energy costs, weak global orders, and record-high interest rates in the Eurozone. Fractious negotiations within the government over next year’s budget, following a constitutional court ruling that created a 60 billion euro ($64.70 billion) hole in public finances, have further dampened the economic outlook.
The major Europe stock markets had a mixed day today:
The major Europe currency markets had a mixed day today:
The above data was collected around 16:04 EST.
US/AMERICAS:
The Federal Reserve will maintain its key interest rate within a targeted range between 5.25% and 5.5% for the third consecutive time. Additionally, the committee indicated the possibility of at least three rate cuts in 2024. This decision was influenced by easing inflation and a stable economy. The “dot plot,” which reflects individual members’ expectations, suggests the potential for four rate cuts in 2025 and three more in 2026, bringing the rate down to between 2% and 2.25%. The Fed’s decision to hold was widely anticipated by the market, and the announcement of future rate cuts led to a positive response from traders, with stock prices rising. The Fed’s decision reflects a cautious approach to policy tightening, considering multiple factors before any further adjustments. The committee’s decision and future outlook are based on the evolving economic conditions, particularly in relation to inflation and the labor market.
US Market Closings:
Canada Market Closings:
Brazil Market Closing:
ENERGY:
The oil markets had a green day today:
The above data was collected around 16:04 EST.
The above data was collected around 16:09 EST.
BONDS:
Japan 0.690% (-4.5bp), US 2’s 4.44% (-0.292%), US 10’s 4.0239% (-18.21bps); US 30’s 4.18% (-0.123%), Bunds 2.168% (-6.3bp), France 2.715% (-5.6bp), Italy 3.94% (-6.5bp), Turkey 23.27% (-32bp), Greece 3.425% (-5bp), Portugal 2.944% (-7.5bp); Spain 3.119% (-12.2bp) and UK Gilts 3.832% (-13.7bp)
The above data was collected around 16:14 EST.
