Global News Summary 9–13 December 2024
United States (USD):
• Economic Growth & Jobs: Non-Farm Payrolls rose by 227k in November (cons: +200k), rebounding from hurricane and strike impacts. Wholesale inflation grew 0.4% MoM in November, raising concerns about price pressures.
• Debt Securities: Treasury yields fluctuated, reflecting optimism for a Fed rate cut. Policymakers remain divided on the December rate decision, though a cut is likely.
• Inflation: November inflation rose 2.74% YoY (Oct: +2.6%), aligning with expectations and supporting further monetary easing.
United Kingdom (GBP):
• Economic Growth: House prices rose 3.7% YoY in November. However, business leaders expressed concerns about higher taxes and employment reforms impacting economic confidence.
• Jobs: UK job postings were 13% below pre-pandemic levels, while public sector workers face pay restraints amid government spending reviews targeting 5% savings.
• Debt Securities: Treasury launched a “line-by-line” review of £1.2 trillion in public spending to manage fiscal constraints.
Eurozone (EUR):
• Political Uncertainty: French PM Michel Barnier was ousted in a no-confidence vote. President Macron plans to avoid legislative elections, while a stopgap budget bill was introduced to ensure government operations.
• Economic Growth: Germany’s factory orders fell 1.5% MoM in October, signaling potential bottoming of its manufacturing recession. Italy revised GDP growth for 2024 to 0.7% (prev est: +1%).
• Debt Securities: The ECB cut rates by 0.25% to 3%, with further reductions likely in January and March as growth remains sluggish and inflation stabilizes at 2%.
Japan (JPY):
• Economic Growth: GDP grew 1.2% annualized in Q3, reflecting ongoing recovery. Corporate goods prices rose 3.7% YoY in November, signaling inflationary pressure.
• Jobs: Sentiment among major manufacturers improved slightly, with the index rising to 14, reflecting cautious optimism ahead of the BoJ’s policy meeting.
China (CNY):
• Economic Growth: November inflation rose just 0.2% YoY (cons: +0.4%), indicating weak demand despite policy efforts. The PBOC adjusted its monetary stance to “moderately loose” for the first time in 14 years to support growth.
• Trade: China launched an antitrust probe into Nvidia and imposed sanctions on US military firms in retaliation for arms sales to Taiwan.
Australia (AUD):
• Economic Growth: GDP rose 0.3% QoQ in Q3 (cons: +0.5%), supported by government spending but weighed down by weak exports and consumer demand. Employment exceeded expectations in November, with 35,600 jobs added and unemployment falling to 3.9%.
• Monetary Policy: RBA remains cautious about rate cuts, considering strong labour market data and inflation concerns.
Switzerland (CHF):
• The Swiss National Bank cut interest rates by 50 bps, bringing them below zero to counter currency appreciation, while signaling further intervention if necessary.
Artificial Intelligence (AI):
• Technological Advancements: OpenAI introduced real-time video analysis for ChatGPT. Nvidia expanded operations in China to focus on autonomous driving technologies.
• Investment Trends: Musk’s xAI raised $6 billion, while Speak, an AI-driven language-learning platform, achieved a $1 billion valuation.
• Regulatory Concerns: The US Copyright Alliance warned the UK against relaxing copyright rules for AI, highlighting risks to investment.
Inflation and Recession Risks:
• United States: Inflation remains a key focus, with wholesale price gains hinting at challenges for sustained monetary easing.
• Eurozone: Lower growth and political instability heighten recession risks, though ECB rate cuts aim to mitigate economic slowdown.
• China & Japan: Persistently weak demand and inflationary pressures indicate diverging monetary policies.
ESG:
• OPEC+ Policy: Production cuts continued amid uncertainties over Trump’s sanctions on oil producers, contributing to a volatile energy market.
Markets reflected mixed trends, with strong US economic data bolstering investor confidence while political and economic uncertainties in Europe and China raised caution.