Global News Summary 23-28 Dec 2024
United States (USD):
• Economic Growth & Jobs: Unemployment benefits applications rose to 1.91 million, the highest in three years, signalling slower job recovery. Retail sales in November increased +0.7% MoM (core sales +0.2%), but consumer confidence sank to 104.7 in December, reflecting uncertainty over Trump administration policies.
• Debt Securities: Long-term US Treasury yields rose, with the 10-year yield reaching 4.62%, as markets adjusted to a slower pace of rate cuts signalled by the Federal Reserve.
• Geopolitical Developments: Congress narrowly averted a government shutdown, while Trump’s transition team pushed for withdrawing from the WHO, raising concerns about global health funding.
United Kingdom (GBP):
• Economic Growth: GDP remained flat in Q3, with output in the services sector stagnating and production falling -0.4%, offset by a +0.7% rise in construction. Retail sales rebounded slightly, growing +0.2% MoM in November but below forecasts.
• Trade & Policy: The government launched consultations on zero-emission vehicle rules following criticism from automakers, highlighting sluggish electric vehicle sales.
• Labour Market: Wage growth rose +5.2% YoY in October, driven by private sector pay increases (+5.4%), challenging hopes for rapid interest rate cuts.
Eurozone (EUR):
• Economic Growth: France faced continued political instability, with Prime Minister François Bayrou focusing on deficit reduction to 5% of GDP in 2025. Germany’s Alternative for Germany party criticised EU policies, calling for reforms to restore competitiveness.
• Debt Securities: French debt issuance plans were kept steady amid political uncertainty, while Germany’s 10-year yield climbed to 2.40%.
• Inflation: Mixed inflation trends persisted, with French and German policymakers emphasising cautious fiscal and monetary approaches.
Japan (JPY):
• Economic Growth: Tokyo inflation rose to +2.4% YoY in December, driven by higher energy prices, supporting expectations of a 2025 interest rate hike.
• Debt Securities: The Japanese government announced a record ¥115.5 trillion initial budget for 2025, cutting fresh bond issuance by nearly 20% due to record tax receipts.
China (CNY):
• Economic Growth: Industrial profits fell -7.3% YoY in November, on track for the largest annual decline since 2000, highlighting weak economic momentum. Retail sales growth slowed to 3% YoY in November.
• Trade & Policy: The US launched a probe into China’s semiconductor subsidies under Section 301, increasing trade tensions.
Australia (AUD):
• Economic Growth: The RBA expressed confidence in achieving inflation targets but warned that persistent wage and demand pressures could complicate monetary easing. Consumer confidence remained weak amid global economic uncertainties.
Artificial Intelligence (AI):
• Key Developments: OpenAI prepared to launch its advanced O3 model for complex problem-solving, while Nvidia supplier Advantest highlighted resilient demand for AI-enabled devices. Concerns grew over the impact of AI demand on energy grids, with potential delays in renewable energy projects exacerbating power shortages.
Environmental, Social, and Governance (ESG):
• Global Shifts: European industrial leaders called for stricter consumer regulations to support green investments, urging policymakers to encourage less polluting product adoption to accelerate the energy transition.
Market Highlights:
• Equities: The S&P 500 fell -1.1% on 28 December, reflecting profit-taking and portfolio rebalancing. Technology stocks led declines, with Tesla and Nvidia dropping 2%.
• Commodities: WTI crude rose +0.8% to $70.20/barrel, while gold declined -0.7% to $2,615.73/ounce.
• Cryptocurrencies: Bitcoin fell -2% to $94,497.53 as risk sentiment cooled.
Conclusion:
The week highlighted rising uncertainty, from political instability in France and trade tensions with China to mixed economic signals in the US and Japan. Markets remain cautious as high valuations, inflation concerns, and geopolitical risks weigh on sentiment heading into 2025.