European sentiment improves, but recessions unavoidable

Wells Fargo Research Team Wells Fargo

United States: Leftovers are for quitters

The closest thing to leftovers in economic data are unfilled orders, which may help sustain factory activity, but they're unlikely to be a saving grace should demand dry up more meaningfully. In addition to a jump in durable goods orders this week, new home sales shot higher in October. The number of people still on unemployment benefits rose to the highest level since March.

Next week: Personal Income & Spending (Wednesday), ISM Manufacturing (Thursday), Employment (Friday).

International: European sentiment improves, but recessions unavoidable

Eurozone and U.K. purchasing manager indices were better than expected in November, but remain in contraction territory. While the upside surprise signals the magnitude of economic contraction may not be as severe as initially expected in Q4-2022, we still believe recessions in the Eurozone and U.K. are imminent.

Next week: China PMIs (Tuesday), Eurozone CPI (Wednesday), Brazil GDP (Thursday).

Credit market insights: China steps in to help struggling property sector

China's property sector has certainly faced challenges this year, as struggles to generate sufficient cash flow and liquidity issues have seen real estate projects across the country stall. Furthermore, over-leveraged developers continue to face elevated probabilities of defaulting on debt as well as an inability to deliver completed properties to homebuyers. Given these problems, the government has taken steps to help alleviate some of the stress on the industry.

Topic of the week: Talking Turkey on thanksgiving

As millions of Americans gather this Thursday, some are noticing all of the food they have brought to the table has left their wallet a little less stuffed this season. Whether it is a meal of traditional Thanksgiving trimmings or an evening gathered around a restaurant table, prices have gone up significantly over the past year.

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Wells Fargo Research Team

Wells Fargo

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.