S&P Futures Rise, On Pace For 9th Gain In 10 Days

Stock futures rise as investors look ahead to Friday’s release of the Fed’s preferred inflation gauge, the core PCE, a reading that may help shape next week’s rate outlook as the BoJ charts its own divergent policy course. As of *;15am ET, S&P 500 futures were 0.2% higher and on pace for the 9th gain in 10 days; Nasdaq 100 futures are +0.3% as Mag 7 names are mostly higher premarket, led by META (+0.6%), AMZN (+0.5%) and NVDA (+0.5%). Tech sentiment got a boost after Nvidia partner Hon Hai Precision Industry reported strong sales. Moore Threads, a leading Chinese AI chipmaker, jumped 425% in its Shanghai trading debut. Netflix meanwhile, fell in the premarket after agreeing a tie-up with Warner Bros, acquiring HBO. Bond yields are modestly higher; the USD is flat. Commodities are mixed: oil and base metals are lower, while precious metals are higher. US economic calendar includes September personal income/spending and PCE inflation gauges and December preliminary University of Michigan sentiment (10am New York time) and October consumer credit (3pm

In premarket trading, Mag 7 stocks are mostly higher (Meta +0.5%, Nvidia +0.4%, Alphabet +0.4%, Microsoft +0.3%, Amazon +0.4%, Tesla unchanged, Apple unchanged).

• Cooper Cos (COO) rises 13% after the health-care company’s guidance for 2026 adjusted earnings per share topped the average analyst estimate. The company also launched a strategic review.
• Hewlett Packard Enterprise Co. (HPE) drops 8% after the company gave an outlook for sales in the current quarter that fell short of high expectations for the AI server business.
• ITT Inc. (ITT) slips 2% after agreeing to acquire industrial equipment manufacturer SPX Flow Inc. from Lone Star Funds in a $4.775 billion cash and stock deal.
• Netflix (NFLX) slips 1.3% after agreeing to buy Warner Bros. Discovery Inc. in a historic combination, joining the world’s dominant paid streaming service with one of Hollywood’s oldest and most revered studios. Shares of Warner Bros. (WBD) are up 1.5%.
• Parsons (PSN) tumbles 15% after the US Federal Aviation Administration and the Department of Transportation awarded the Brand New Air Traffic Control System contract to Peraton.
• Rubrik (RBRK) rallies 18% after the cybersecurity firm raised its revenue forecast for 2026 while narrowing its view for adjusted losses per share.
• SentinelOne (S) falls 8% after the software firm’s fourth-quarter outlook missed expectations. It also initiated a search for a new chief financial officer.
• SoFi Technologies (SOFI) is down 7% after the online lender’s offering of 54.5m shares.
• Ulta Beauty Inc. (ULTA) rises 6% after raising its full-year outlook and reporting better-than-expected results in the third quarter, a sign that consumers are overcoming any reluctance to spend and shelling out for cosmetics and hair supplies.
• Victoria’s Secret (VSCO) climbs 12% after the company reported better-than-expected sales and lifted its outlook for the year, a sign that its turnaround strategy is working.

In corporate news, Perplexity AI says billionaire Cristiano Ronaldo has become an investor. Cloudflare is investigating issues with dashboard and related APIs.

Futures on the US benchmark rose on Friday after the index closed within 0.5% of a fresh record. The gauge is set for its first back-to-back weekly gain since October, signaling that traders are shaking off recent jitters over valuations and the lack of visibility on the economy during the government shutdown. Yet in a notable change from recent trends, tech hasn’t led the recent rally, and with sector participation broadening, the market’s advance may continue - even as the economic data underpinning the move exhibits a “split screen,” with non-jobs data surprising to the upside.

With a rate cut next week largely priced in and bets pointing to further easing into 2026, investors are gearing up for a year-end rally in what is typically a supportive month for stocks. Growing confidence that the US economy remains resilient, despite softer employment, is also prompting rotations into stocks that tend to benefit from domestic strength.

"Santa will bring presents for everybody, toys for the kids and gains for investors,” said Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management. “Apart from the regular seasonality there are plenty of other reasons supporting the market: rate cuts and ongoing M&A activity are some of them.”

Bloomberg Economics Chief Economist Tom Orlik expects a dovish Fed to cut rates another 100 basis points in 2026, adding support to the AI investment upswing. A bonfire of regulations will also stoke growth and together with gradual price pass-through from tariffs, these factors will keep inflation above target. Kevin Hassett said the Fed should cut rates next week and said he wanted to “get to a much lower rate” over the long run.

Later on Friday, markets will a get a dated reading on the Federal Reserve’s preferred inflation gauge. The figures will include the personal consumption expenditures price index and a core measure that excludes food and energy. Economist project a third-straight 0.2% increase in the core index for September. That would keep the year-over-year figure hovering a little below 3%, a sign that inflationary pressures are stable, yet sticky.

While the data is unlikely to derail a December rate cut, it “may change the tone from Chairman Powell,” said Wolf von Rotberg, equity strategist at Bank J Safra Sarasin. “If he emphasizes inflation risks in his press conference, markets may reprice the rate trajectory for 2026, thereby increasing the pressure on the long end of the curve and on equity market valuations.”

BofA strategist Michael Hartnett notes bond vigilantes have effectively become the new regulators of AI capex. 
Nvidia partner Hon Hai reported a 26% sales jump in November, suggesting robust demand for AI servers amid a broader development boom. Moore Threads Technology, a leading Chinese AI chipmaker, jumped 425% in its Shanghai trading debut after raising 8 billion yuan ($1.13 billion).

In Europe, the Stoxx 600 is up 0.3%, rising for a fourth day and hitting a three-week high in the process. Financial services, autos and construction are leading gains while energy is a drag after downgrades in the sector from JPMorgan.  Here are some of the biggest movers on Friday:

• UCB shares jump as much as 8.2% after the Belgian biopharma company lifted its guidance for the full year.
• Renk rises as much as 5.7% as Bank of America double upgrades the shares to buy, citing an attractive valuation.
• Ocado shares rise as much as 16% after the online grocer said it will receive a $350 million cash payment from Kroger to compensate for the US grocer’s decision to close three automated warehouses and to not go ahead with another.
• Trustpilot shares jump as much as 11% after Morgan Stanley raised the stock to overweight a day after the stock was targeted by short seller Grizzly Research, saying the company’s user reviews hold unique value against increasing content from generative AI.
• Swiss Re drops as much as 7.6% after announcing targets for 2026, with analysts seeing both the buyback and group net income guidance as “underwhelming.”
• Big Yellow Group shares drop as much as 6% after talks about a possible takeover offer from Blackstone collapsed.
• Baltic Classifieds shares drop as much as 5.1% after analysts cut their price target on the online platform.
• OVH Groupe shares drop as much as 15% after an investor offloaded shares in the IT services company at a discount to yesterday’s close.

Earlier in the session, Asian stocks reversed earlier losses as investors await key US economic data later Friday. Japan markets closed lower amid profit-taking following strong gains in the previous session. The MSCI Asia Pacific Index rose as much as 0.3%, boosted by TSMC, Samsung Electronics and SoftBank Group. The gauge is on track for a second straight week of gains. Shares advanced in India after the central bank cut interest rate and signaled an openness for further easing. Benchmarks in Japan fell more than 1%. Chinese chipmakers are coming into focus, with Moore Threads surging 425% in its Shanghai trading debut after raising 8 billion yuan ($1.13 billion), the second-largest onshore IPO of the year. Elsewhere in the region, Philippine inflation slowed in November, supporting another cut in benchmark interest rates as a graft scandal shattered consumer and investor confidence. Markets were closed in Thailand. 

In FX, the Bloomberg Dollar Spot Index falls 0.1%. The yen is lower, having erased an earlier gain of 0.5%, seen after Bloomberg reported reported Bank of Japan officials are ready to raise interest rates at a policy meeting later this month. The Aussie is leading gains against the greenback, up 0.4%.

In rates, treasuries drop across the curve, following similar price action across European bonds in the wake of strong October German factory orders and French industrial production data. Treasury long-end yields are about 1.5bp higher on the day, steepening curve spreads by less than a basis point. US 10-year yield is near 4.11%, about 1bp cheaper on the day, broadly in line with bunds and gilts. Focal points of US session include PCE inflation gauge derived from September personal income and spending data, in release delayed by last month’s US government shutdown. IG dollar bond issuance slate is blank so far after just one offering was priced Thursday, however $26 billion was priced over the first three days of this week by 23 issuers — one of the strongest starts to a December. Treasury auctions resume Monday with $58 billion 3-year new issue, followed by $39 billion 10-year and $22 billion 30-year reopenings Tuesday and Thursday, skipping over Wednesday’s Fed policy announcement.

In commodities, oil prices are steady, with WTI crude futures near $59.50 a barrel. Spot gold rises $18. Bitcoin falls 0.8%. 

Looking to the day ahead now, US data releases include PCE inflation for September, and the University of Michigan’s preliminary consumer sentiment index for December, all at 10am ET. We also get German factory orders and French industrial production for October, and Canada’s employment report for November. Finally from central banks, we’ll hear from the ECB’s Villeroy and Lane.

Market Snapshot

• S&P 500 mini +0.2%
• Nasdaq 100 mini +0.4%
• Russell 2000 mini little changed
• Stoxx Europe 600 +0.3%
• DAX +0.5%
• CAC 40 +0.3%
• 10-year Treasury yield +1 basis point at 4.11%
• VIX little changed at 15.75
• Bloomberg Dollar Index little changed at 1213.14
• euro little changed at $1.1652
• WTI crude -0.2% at $59.53/barrel

Top Overnight News

• A divided Supreme Court cleared Texas to use its new Republican-drawn congressional map for the 2026 midterm election, overruling a lower court order and bolstering GOP hopes of picking up as many as five new House seats in the state. BBG
• The US is prioritizing a stable trade dynamic with China despite a push by some allies for coordinated action against Beijing, USTR Jamieson Greer said. BBG
• President Trump has issued a new national-security strategy that sharply criticizes the “unrealistic expectations” of European leaders for settling the war in Ukraine and calls for an end to NATO expansion. WSJ
• A bipartisan Senate bill seeks to block Nvidia from shipping advanced AI chips to China. The legislation proposes a 30-month halt on export licenses to US adversaries. BBG
• US Homeland Security Secretary Noem said the Trump administration is expanding the countries on the travel ban to over 30: Fox News.
• BOJ officials are ready to raise the policy rate at this month’s meeting — taking it to its highest level since 1995 — provided there’s no major shocks in the meantime, people familiar said. The yen strengthened. BBG
• China's exports likely returned to growth in November after an unexpected dip in October, as manufacturers rushed to move inventory to take advantage of a fresh tariff truce with the U.S. RTRS
• The Reserve Bank of India (RBI) cut its key repo rate by 25 basis points on Friday and left the door open for further easing as it took steps to boost banking-sector liquidity by up to $16 billion to support a "goldilocks" economy. RTRS
• The Dutch pensions overhaul looks set to push European nations to sell fewer long-dated bonds. Changes may be announced in coming weeks as governments unveil their 2026 issuance plans. BBG
• Netflix to Acquire Warner Bros. Following the Separation of Discovery Global for a Total Enterprise Value of $82.7 Billion (Equity Value of $72.0 Billion).
• Morgan Stanley forecasts a 25bps Fed cut in December (prev. forecast unchanged). Cuts in January and April 2026, a terminal of 3.00-3.25%.
• Federal Reserve Board announced a new pricing for payment services provided to banks and credit unions, effective 1st January 2026, while Fed's Bowman emphasised the importance of checks as a payment method and said the Fed cannot endorse the RFI regarding the future of check services.

Company News

• Dell (DELL) reportedly plans a price hike of 15-20% from mid-December and Lenovo (992 HK) from January 2026, according to TrendForce, citing sources.
• Cloudflare (NET) announced service issues have been resolved, according to the status page. Following issues that lasted for around 30 minutes.
• Baidu (9888 HK/ BIDU) reportedly weighs a Hong Kong IPO for its AI chip unit Kunlunxin, to rival NVIDIA (NVDA), according to Bloomberg, citing sources; unit could be valued in excess of USD 3bln
• Apple (AAPL), Google (GOOGL) and Samsung (005930 KS) have asked the Indian Government not to accept telecom proposal over privacy concerns and regulatory overreach, according to Reuters, citing sources.

Trade/Tariffs

• US Trade Representative Greer said trade with China needs to be balanced and probably needs to be smaller, while he added they want to have stability in the relationship with China, and that the US trade deficit in goods with China is down about 25%, which is the right direction.
• USTR Greer also noted there are problems with the US-Mexico-Canada Trade Agreement and that they already have adjustments to some of these challenges, as well as stated that the US wants to make sure that Canada and Mexico aren't used as an export hub for China, Vietnam or Indonesia, among others.
• China's Foreign Ministry Spokesperson said that China has repeatedly stated its position on the issue of US chip exports to China, via Global Times.
• Chinese drone maker DJI urged the Trump administration to complete audits or extend the deadline for the security review, according to a letter to Congress.
• China and France issued a joint statement on agricultural cooperation and signed an MOU on registration of infant milk powder formulas, according to Xinhua.
• Japanese Trade Minister Akazawa said they are monitoring US tariff lawsuit developments and he confirmed that Japanese companies have filed lawsuits in the US seeking refunds of additional tariffs.
• Russian President Putin said Russia is ready to provide uninterrupted fuel supplies to India. Russia and India express interest in deepening cooperation in the exploration, processing and refining technologies for critical minerals and rare earths.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed with the regional bourses mostly rangebound, amid light fresh catalysts ahead of US PCE data. ASX 200 edged higher but with gains capped as strength in the mining and materials sectors was partially offset by weakness in consumer discretionary, energy and telecoms, while price action was also contained by the absence of any pertinent data. Nikkei 225 underperformed amid the increased BoJ December rate hike bets and after dismal Household Spending data, which showed a surprise contraction. Hang Seng and Shanghai Comp saw two-way price action with early headwinds following another consecutive liquidity drain by the PBoC and reports that US senators seek to block NVIDIA (NVDA) sales of advanced chips to China for 30 months, which would target NVIDIA's H200 and Blackwell chips.

Top Asian News

• BoJ is said to likely hike this month and leave the door open to more, while the central bank is to check the data and market moves up to the final decision, according to Bloomberg.
• Japan's Chief Cabinet Secretary Kihara said they will take appropriate steps on excessive and disorderly moves in the FX market if necessary. Expects the BoJ to conduct monetary policy in an appropriate manner.
• Japan's Economy Minister Kiuchi said the inflationary impact of the stimulus package will likely be limited. The government will keep an eye on market moves with a high sense of urgency. Important for stocks, FX and bond markets to move in line with fundamentals. Specific monetary policy means is up to the BoJ, and the Government will not comment. Hopes the BoJ guides appropriate monetary policy to stably achieve the 2% inflation target.
• Hong Kong's Court endorsed a proposal allowing Country Garden Holdings (2007 HK) to extend repayment of USD 17.7bln in offshore debt.
• China's Commerce Minister said China will ramp up efforts to expand imports, via Xinhua. The Commerce Minister will also expand service consumption, increase implementation of inclusive policies that directly reach consumers, expand auto consumption and promote renewal consumption of home appliances and eliminate restrictive measures.
• RBI cut the Repurchase Rate by 25bps to 5.25%, as expected, with the decision unanimous and it maintained a neutral stance although MPC member Ram Singh wanted the stance to be changed to accommodative from neutral, while the Marginal Lending Facility Rate was lowered by 25bps to 5.50% and the Standing Deposit Facility Rate was reduced by 25bps to 5.00%.

European bourses trade modestly firmer, with little macro news to steer price action. Sentiment follows on from a mixed and quiet APAC session. European sectors mostly reside in the green, led by Financial Services, Basic Resources, Construction and Chemicals. Higher metal prices—particularly copper—help underpin sentiment in Basic Resources, while broader macro flow remains light.

Top European News

• Regulators at the BoE announce plans to support the growth of the mutuals sector. Measures include: A PRA and FCA review of mutual credit union regulations, considering more risk-based requirements for larger, complex firms and proportionality for smaller credit unions.

FX

• DXY has unwound most of its earlier losses. Initially hit by a firmer JPY on the back of more hawkish BoJ sources, coupled with verbal intervention (see below for details). The JPY reaction took DXY down to a 98.805 intraday trough (vs 99.075 APAC high), although since newsflow quietened and despite a stable risk environment, the JPY waned and DXY now attempts to reclaim 99.00 to the upside at the time of writing. The index, however, remains within yesterday's 98.765-99.08 ahead of the September US PCE, which was delayed by the US government shutdown.
• JPY has surrendered most of its earlier gains after an initial surge triggered by Bloomberg sources suggesting the BoJ is likely to hike this month while keeping the door open to further tightening. The reports briefly pushed USD/JPY below 154.50. This was followed by verbal intervention from Chief Cabinet Secretary Kihara, who reiterated that authorities would take appropriate steps against excessive or disorderly FX moves if needed. USD/JPY subsequently touched a 154.34 low before rebounding and stalling just shy of 155.00, despite limited follow-through newsflow and a stable risk backdrop.
• AUD is the top gainer, lifted by a surge in copper prices and earlier USD softness, though both AUD and copper later eased off highs as the dollar attempted a recovery. The AUD/NZD cross extended its rebound, pushing back above 1.1450 and trading toward the upper end of a 1.1461–1.1484 range.
• Other G10s vary and continue to take their cue from broader USD moves, though EUR saw a couple of brief upticks after slight upward revisions to Eurozone Q3 GDP and Employment. EUR/USD now trades mid-range within 1.1640–1.1672.

Fixed Income

• USTs remain flat in a thin 112-22+ to 112-27+ band. Traders look ahead to US PCE at 15:00 GMT / 10:00 ET, a release that will feed into the debate around a potential December Fed cut. Odds of such a move have climbed above 85% in recent sessions, up from the low-60% range a month ago, aided by comments from Fed’s Williams, who said policymakers have room for another adjustment in the “near term.”
• JGBs were hit overnight on further hawkish BoJ source reports, with market-implied odds of a December hike nearing 80%. The 10yr Japanese future fell over 20 ticks to a 133.91 trough before stabilising. Since then, bonds have held in tighter ranges as attention turns to US PCE.
• Bunds were marginally softer in a 128.29–128.52 range as markets awaited the 11:30 GMT Bundestag pension vote, which is now widely expected to pass after Die Linke signalled it will abstain—lowering the effective majority threshold and reducing the relevance of dissent within the CDU/CSU’s Young Group. The vote remains a key barometer of Chancellor Merz’s coalition stability.

Commodities

• WTI and Brent continue to trade in tight ranges with European trade underway, and following an overnight session devoid of crude-specific catalysts. Early-door comments from a Kremlin aide noted that Russia and the US are progressing in Ukraine-related talks and that Moscow is ready for further engagement, though this echoed recent rhetoric and left crude benchmarks largely unreactive pending fresh developments.
• Spot Gold found support near USD 4,200/oz in early APAC trade and steadily climbed to a USD 4,231/oz peak as Europe opened. The overnight bid was helped by weakness in the Dollar, with JPY strength driven by reports of a potential December BoJ rate hike. Since the European open, the Dollar has begun to recover, but XAU continues to hold near session highs.
• 3M LME Copper extended its rally to fresh record highs after Thursday’s consolidation in a tight USD ~180/t band. The contract opened just below USD 11.45k/t before buyers immediately stepped in, driving prices to a new all-time high at USD 11.7k/t as Europe opened.
• Discounts for Russian ESPO blend crude oil delivered to China have widened to USD 5-6/bbl vs ICE Brent due to falling demand, according to Reuters

Geopolitics: Middle East

• Hamas Leader to Al-Arabiya: "The Movement Does Not Want to Continue to Rule Gaza ... We Agreed to Form a Technocratic Committee to Govern Gaza".
• US President Trump plans to announce before Christmas the transition to phase 2 of the agreement to end the war in Gaza and the establishment of the new governing body that will manage the strip, according to Axios's Ravid.

Geopolitics: Ukraine

• Russia's Kremlin said Moscow is waiting for the US reaction after Putin-Witkoff meeting, while it added that there is no plan for a Putin-Trump call for now.
• Russian Kremlin aide said Russia and the US are moving forward in talks relating to Ukraine. Ready for further work with the current US negotiating team.
• The US has urged the EU to oppose the plan to use frozen Russian central bank assets to back a massive loan to Ukraine, via Bloomberg Sources.
• UK ministers are prepared to unlock GBP 8bln of frozen Russian assets to aid Ukraine, according to The Times.

Geopolitics: Other

• US military said it conducted a lethal kinetic strike on a vessel in international waters in the eastern Pacific on Thursday.

US Event Calendar

• 10:00 am: Sep Personal Income, est. 0.3%, prior 0.4%
• 10:00 am: Sep Personal Spending, est. 0.3%, prior 0.6%
• 10:00 am: Sep Real Personal Spending, est. 0.1%, prior 0.4%
• 10:00 am: Sep PCE Price Index MoM, est. 0.3%, prior 0.3%
• 10:00 am: Sep PCE Price Index YoY, est. 2.8%, prior 2.7%
• 10:00 am: Sep Core PCE Price Index MoM, est. 0.2%, prior 0.2%
• 10:00 am: Sep Core PCE Price Index YoY, est. 2.8%, prior 2.9%
• 10:00 am: Dec P U. of Mich. Sentiment, est. 52, prior 51
• 3:00 pm: Oct Consumer Credit, est. 10.48b, prior 13.09b

DB's Jim Reid concludes the overnight wrap

Markets saw a modest risk-on move yesterday, as a decent batch of US data saw investors price in fewer rate cuts next year. That optimism meant the S&P 500 (+0.11%) advanced for a third consecutive session, closing less than half a percent beneath its record high, while the VIX index of volatility (-0.30pts) fell to a two-month low of 15.78. Moreover, futures are pointing to a further advance this morning, with those on the S&P 500 up another +0.20% overnight, which would take the index even closer to its October record.  However, more hawkish expectations meant bonds struggled, and the 10yr Treasury yield (+3.5bps) hit a two-week high of 4.10%. Meanwhile, those bond losses echoed around the world, not least after multiple reports suggested the Bank of Japan was on the verge of another rate hike in a couple of weeks’ time. So yesterday saw 10yr JGB yields close at a post-2007 high of 1.93%, and they’re up another +1.1bps this morning to 1.94%.

That US data helped to drive the hawkish repricing, because it suggested the labour market was in a more robust position than previously thought. For instance, the weekly initial jobless claims fell to just 191k in the week ending November 29 (vs. 220k expected). Clearly it’s worth noting that we often see distortions in these numbers around the Thanksgiving holiday, so we shouldn’t overegg the improvement, but it was still a promising sign. Indeed, the 4-week moving average fell to its lowest since January, at just 214.75k. And in other news, the report on announced layoffs from Challenger, Gray & Christmas found there were fewer layoffs than expected, with a rise of +23.5% year-on-year in November (vs. +48.0% expected). So collectively, those releases suggested the US labour market was in a slightly better position than previously thought, despite the broader signs of softening we’ve seen recently. In addition, those releases matter more than usual for the Fed next week, because the data backlog from the shutdown means we won’t get the November jobs report as originally scheduled today, and instead have to wait until December 16.

With that in mind, investors adjusted their expectations in a hawkish direction for the coming months. For instance, even though a December cut is priced above 90%, there was growing scepticism that would be followed up by another, with the total amount of cuts priced by March 2026 down -1.8bps on the day to 39bps. And looking further out, the amount of rate cuts priced by the December 2026 meeting came down -5.2bps on the day to 86bps. So that shift in expectations meant Treasuries lost ground across the curve, with the 2yr yield (+3.8bps) up to 3.52%, whilst the 10yr yield (+3.5bps) rose to 4.10%.

In the meantime, the newsflow out of Japan also goes some way to explaining the latest bond selloff, as markets have become increasingly confident the BoJ will hike again this month. First, there was a Reuters report shortly before we went to press yesterday, which said the BoJ would likely hike rates this month, and the government would tolerate the move. Then a few hours later, Bloomberg similarly reported that key members of the government wouldn’t try to stop the BoJ from hiking in December. So that meant the Japanese yen strengthened against other major currencies yesterday, and this morning it’s strengthened back above 155 per dollar to 154.89.

That newsflow has continued overnight, with Bloomberg reporting this morning that BoJ officials are ready to hike rates at the next meeting, “provided there’s no major shock to the economy or financial markets in the meantime”. Moreover, the article said that the BoJ would indicate that further rate hikes would follow if its outlook for the economy were realised. So if they do proceed, that would take the policy rate up to 0.75%, the highest since 1995. That’s led to a hawkish reaction among Japanese assets, with the yen strengthening +0.18% this morning against the US Dollar, whilst the Nikkei is down -1.29%. And the yield curve has steepened as well, with the 5yr yield (+2.2bps) up to a post-2008 high of 1.42% this morning.

Elsewhere in Asia, we’ve seen a more mixed performance this morning. So the KOSPI (+1.23%) has posted a strong advance, but the CSI 300 (+0.11%) and the Shanghai Comp (+0.05%) have only posted a modest gain, whilst the Hang Seng (-0.06%) is slightly lower. Meanwhile in India, the central bank cut rates by 25bps in line with expectations, taking the repurchase rate down to 5.25%.

All that follows on from a pretty subdued session for US equities yesterday, with the S&P 500 (+0.11%) posting a third consecutive advance. That left the index just -0.49% beneath its record closing high from late-October, whilst other indices like the NASDAQ (+0.22%) and the Magnificent 7 (+0.53%) also moved higher. In terms of specifics, Meta (+3.43%) rose after a Bloomberg report said that executives were considering budget cuts up to as much as 30% for the metaverse group. Meanwhile, Dollar General (+14.01%) was the top performer in the S&P after raising their full-year outlook. However, some of the more defensive sectors in the S&P 500 struggled, with consumer staples (-0.73%) and healthcare (-0.73%) both losing ground. Futures on the S&P 500 are pointing to further gains this morning, with a +0.20% advance.

Earlier in Europe, equities had put in an even stronger performance, with the STOXX 600 (+0.45%) closing less than 1% beneath its own record high. That was echoed across the continent, where the DAX (+0.79%) and the CAC 40 (+0.43%) also rose, whilst Spain’s IBEX 35 (+0.97%) hit an all-time high. As in the US however, sovereign bonds struggled, with yields on 10yr bunds (+2.4bps), OATs (+3.2bps) and BTPs (+2.2bps) all moving higher. Finally in the commodity space, Brent crude rose +1.02% to $63.31/bbl as investors weighed ongoing risks to Russian oil supply. 

To the day ahead now, and US data releases include PCE inflation for September, and the University of Michigan’s preliminary consumer sentiment index for December. Otherwise, we’ll get German factory orders and French industrial production for October, and Canada’s employment report for November. Finally from central banks, we’ll hear from the ECB’s Villeroy and Lane.