Global News Summary 25 to 29 November 2024

Global markets experienced cautious optimism amid evolving economic policies and geopolitical developments. The U.S. saw robust GDP growth of 2.8% in Q3, while inflation rose 2.8%, supporting the Federal Reserve’s gradual rate-cut approach. The eurozone faced fiscal challenges, with French borrowing costs surpassing Greece’s due to political instability, while Japan’s yen strengthened on higher-than-expected inflation. AI investments surged, with SoftBank and German startups leading funding rounds, and ESG continued gaining strategic importance at the COP29 summit. Global growth forecasts remained steady, with the OECD projecting 3.1% growth in 2024, despite risks from trade tensions and tariff policies. Markets overall remained resilient, with U.S. equities posting strong gains and Bitcoin nearing $100,000.

United States:

   •   Economic Growth and Inflation: The Federal Reserve’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, rose by 2.8% year-over-year in October, aligning with expectations and supporting the Fed’s cautious approach to interest rate adjustments. Gross Domestic Product (GDP) increased by 2.8% in the third quarter, driven by a 3.5% rise in consumer spending and upward revisions in business investment in research and development.

   •   Jobs: The labor market remained robust, with unemployment rates holding steady and job creation meeting forecasts, reinforcing the Fed’s patient stance on monetary policy.

   •   Debt Securities: U.S. Treasury yields experienced a decline, with the 10-year yield falling nine basis points to 4.17% on November 29, reflecting strong demand for government debt and easing concerns over post-election fiscal policies.

   •   Trade Policies: President-elect Donald Trump’s proposal to impose tariffs of 25% on imports from Canada and Mexico, and an additional 10% on Chinese goods, raised concerns about potential economic repercussions, including a projected 0.3% reduction in U.S. growth by 2026 and a 0.5% increase in inflation by 2025.

United Kingdom:

   •   Migration and Fiscal Policy: Net migration to the UK exceeded 900,000 for the year ending June 2023, prompting criticism from political leaders. The Treasury postponed its multiyear spending review to June, indicating challenges in setting funding priorities amid evolving economic conditions.

Eurozone:

   •   Inflation and Monetary Policy: Eurozone inflation rose to 2.3% in November from 2.0% in October, primarily due to a 3.9% increase in service sector prices, despite a 1.9% decline in energy costs. The European Central Bank (ECB) signaled intentions to continue cutting interest rates to stimulate growth, with discussions of a potential half-point reduction at the December meeting.

   •   Political Developments: In France, borrowing costs surpassed those of Greece for the first time, reflecting investor concerns over Prime Minister Michel Barnier’s proposed €60 billion in tax increases and spending cuts amid a lack of parliamentary majority.

Japan:

   •   Currency and Inflation: The yen appreciated against the dollar, strengthening by 1.3% to 149.64 per dollar, following higher-than-expected Tokyo inflation data, which showed a 2.6% increase in November, surpassing estimates.

   •   Fiscal Policy: Japan’s government considered postponing tax hikes intended to fund increased defense spending, opting instead to utilize higher-than-expected tax revenues and unused funds to finance a ¥13.9 trillion supplementary budget.

Australia:

   •   Monetary Policy: ANZ revised its forecasts, anticipating the Reserve Bank of Australia to commence a more gradual easing cycle, with the first rate cut expected in May 2025, citing persistent core inflation and resilient labor market conditions.

Artificial Intelligence (AI):

   •   Investments: SoftBank planned to invest up to $1.5 billion in OpenAI, aiming to strengthen its position in the AI sector. German startup Black Forest Labs entered discussions to raise up to $200 million, with participation from Andreessen Horowitz, to support its AI-driven image production services.

   •   Regulatory Developments: The European Union advanced its AI Act, focusing on ensuring safety and fundamental rights in AI systems, while China introduced a framework emphasizing the balance between innovation and regulation in AI development.

Environmental, Social, and Governance (ESG):

   •   Corporate Perspectives: A report indicated that 71% of corporate leaders viewed ESG investments as a competitive advantage in 2024, up from 60% in 2023, highlighting the growing strategic importance of ESG considerations.

   •   Global Conferences: The COP29 summit in Baku focused on setting new global climate finance targets, acknowledging the financial challenges posed by the climate crisis, with estimated global damage costs reaching up to $3.1 trillion annually by 2050.

Recession Indicators:

   •   Global Outlook: The OECD projected steady global growth of 3.1% in 2024, with a modest increase to 3.2% in 2025, as inflation trends downward and unemployment remains low, suggesting a reduced risk of recession in the near term.