Macro Wrap

The main theme overnight was risk-on. All three major US stock indices rose for the third consecutive trading day, fuelled by growing optimism that the Fed may deliver a rate cut in December. The Fed funds futures are pricing in 82% chance of a 25bp cut for the December meeting, up from as low as 29% chance seen last Wednesday. They are pricing in a total cut of 61bp by June-2026 and 94bp by December-2026

The DJIA, the S&P500, and the Nasdaq Composite Index rose 1.4%, 0.9%, and 0.7% respectively. The Eurostoxx 50 rose 0.8%. The Dollar Index fell 0.3% to 99.80. EUR-USD rose 50 pips to 1.1570. The US 2Y yield fell 4bp to 3.46% and the 10Y yield dropped 3bp to just under 4.00%. The German 10Y yield fell 2bp to 2.67%. The UK 10Y yield dropped 4bp to 4.49%. Brent crude oil prices fell 1.4% to USD62.48. Gold edged down 0.1% to USD4,131.

The latest US data releases were unimpressive. US private employers cut 13,500 jobs weekly in the four weeks to November 8, 2025, up from a 2,500 decline earlier, US producer prices rose 0.3% in September 2025, rebounding from a 0.1% drop in August and meeting market expectations. Food prices increased by 1.1%, driven by higher meat costs, while energy prices rose 3.5%, boosting goods inflation to 0.9%, the highest in over a year. Service prices remained unchanged. Annual producer price inflation held steady at 2.7%. Positive for Gold

US retail sales increased by 0.2% in September 2025, the smallest rise in four months and below the 0.4% forecast. Notable increases were at miscellaneous store retailers (2.9%) and gasoline stations (2%). Declines occurred in sporting goods (-2.5%), clothing (-0.7%), and electronics (-0.5%). Sales, excluding key sectors for GDP calculation, fell 0.1% versus a 0.6% rise in August. Positive for Gol

Germany’s 3Q2025 GDP printed at 0% q/q, confirming the preliminary figures, although it was up 0.3% y/y as weak exports pressured the figures for the quarter under review.