Weekly Investment News
Major U.S. indices finished the week higher, in local terms, as investors shared a similar sentiment to consumers seen in Friday’s release. Driven by optimism in the labour market, U.S. consumer confidence rose to 111.7 in November, representing its highest level in over a year. The week also started brightly, with markets rallying following the President-elect’s nomination of Scott Bessent as treasury secretary. In economic data releases, core Personal Consumption Expenditures (PCE) inflation for October came in at 2.8%, higher than the 2.7% recorded in the month previous, and the highest reading since April. Although this met consensus estimates, the 10-year Treasury yield dropped to its lowest point since October last week. The minutes from the Federal Open Market Committee (FOMC) meeting earlier in November were also released but provided little insight for economists regarding the Fed’s outlook.
In the Eurozone, Consumer Price Index (CPI) data recorded annual price growth at 2.3% in November, coming in above the European Central Bank’s (ECB) 2% target. European equities had a muted reaction to the announcement however, since the reading was in line with expectations. On the currency front, the euro was propelled higher after ECB official Isabel Schnabel warned of limited room for rate cuts but slid again in reaction to worsening consumer confidence data in Germany.
In Japan, the Nikkei 225 ended the week in the red as economic releases added to the hawkish sentiment. Core CPI accelerated to 2.2% YoY in November, staying above the Bank of Japan’s 2% benchmark. The Japanese yen hit a six-week high against the dollar on Friday as expectations of a 25bps rate hike in December increased. In China, the rally in 30-year sovereign bond prices continued, as yields fell below Japan’s for the first time.
In the UK, a quiet week in terms of economic releases meant the Financial Times Stock Exchange 100 Index (FTSE 100) traded mostly flat, with positive earnings from easyJet helping to boost the index higher on Friday.