Primo Piano

Markets, the month of December begins today with 3 key points

The financial markets today enter the last month of a year full of surprises.
In Asia, December started off shakily, with stocks mixed, the dollar on the defensive and oil prices extending their recent decline.
November ended trading with a global stock rally, in which only China did not shine.
Investors are therefore preparing for a positive start to December in Europe, full of expectations about the next central bank rate cuts.
A packed calendar, with the release of manufacturing PMIs from countries across Europe, will provide a clearer picture of the region's economy today.
Meanwhile, futures indicate an upward opening for European stock markets.
In this framework of expectations, 3 factors are being closely watched by investors for the month of December.
read also Why China is not included in the November stock rally 1.
Inflation and rates The data on Thursday 30 November from both the euro zone and the United States showed that inflation is slowing down more than expected.
The positive surprise has boosted expectations of rate cuts by central banks, with money markets pricing in more than 100 basis points in cuts next year from both the Fed and the ECB.
The disconnect between traders' bets and central banks deepened after the week's results.
Central banks oppose rumors of rate cuts and are more cautious, while markets take into account the relatively more favorable inflation data to be optimistic about a decrease in the cost of money between March and April 2024.
read also The inflation is slowing down more and more in Europe (and in Italy).
What will the ECB do? 2.
US resilience…or not? US consumer spending, inflation and the job market have all cooled in recent weeks, further highlighting a slowing economy.
Inflation-adjusted personal spending rose 0.2% last month after a downwardly revised 0.3% in September.
Separate data showed that recurring claims for unemployment benefits are at their highest levels in two years.
The data is consistent with expectations that the economy will moderate in the fourth quarter, following the strongest growth in nearly two years.
Cooler demand may help reassure the Fed that inflationary pressures will continue to ease, reinforcing expectations that central bankers are done raising interest rates.
3.
Oil down, OPEC confusion Oil prices widened their losses on this first day of December and look set to record a sixth consecutive week of declines.
Voluntary production cuts agreed to by OPEC+ producers have fallen short of market expectations.
The cartel, which pumps more than 40% of the world's oil, is focusing on reducing production as prices have fallen from around $98 in late September, amid concerns about weaker economic growth in 2024 and expectations of a surplus of offer.
Saudi Arabia, Russia and other OPEC+ members have agreed to a voluntary production reduction of 900,000 barrels per day as well as extending production cuts already in place by 1.3 million barrels per day.
Delegates had previously discussed up to 2 million barrels a day in new production limits.
Saudi Arabia, Russia, the United Arab Emirates, Iraq, Kuwait, Kazakhstan and Algeria are among the producers that have said the cuts, which amount to 2.2 million barrels in total, will be rolled out gradually after the first quarter if conditions market will allow it.
Separately, Brazil said Thursday it would join OPEC+ next year, although such a move would not bind South America's largest country to production cuts.

Author: A.W.M.

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