Sentiment is leaning on Fed and BoJ expectations for Dec rate decisions

EU Mid-Market Update: Sentiment is leaning on Fed and BOJ expectations for Dec rate decisions; ChatGPT traffic fell in Nov.

Notes/observations

- Global risk appetite holds firm after soft US ADP data bolstered Fed cut expectations for Dec 10th, European indices lifted in sympathy.

- Eurozone bond yields tick marginally higher while focus overnight was on Japan’s JGBs, with 10-year yield hitting highest since 2007. The 30-year auction had very strong support with >4x bid-to-cover.

- Gold ease as profits are taken ahead of US jobless claims and PCE data, while Bitcoin holds above $90K.

- Oil prices edge up amid ongoing attacks on Russian energy infrastructure and stalled Ukraine peace talks, though 2025 oversupply concerns limit gains.

- For China, UBS forecasts a 2026 GDP target of 4.5-5.0%, with the mid-December Central Economic Work Conference likely to extend consumption subsidies into 2026, deliver modest fiscal/monetary support, and reaffirm manufacturing upgrades rather than capacity cuts.

- According to SimilarWeb, ChatGPT's website visits fell to 5.844 billion in November 2025, below the 6 billion benchmark, marking its second month-over-month decline this year. This drop occurred despite setting a daily traffic record of 233 million visits on November 18, the day of the Cloudflare outage. SimilarWeb's generative AI traffic share chart shows OpenAI's continued dominance in the space, but also reveals a rise in Google's share.

- On corporate side, autos power early gains, with Porsche and Mercedes up 3%. Siemens Energy surged 2.5% after JPMorgan upgraded to overweight and raised target to €160, citing resolved Gamesa problems and booming electricity demand from AI and electrification trends. Frasers posted a solid £447M H1 profit and maintained FY26 guidance despite a cautious consumer outlook. Rio Tinto fell as it scales back lithium ambitions to existing projects only while highlighting $650M in annualized cost savings - a more conservative stance than copper-aggressive peer Glencore.- Asia closed mixed with Nikkei225 outperforming +2.4%. EU indices +0.0-0.8%. US futures +0.1%. Gold -0.1%, DXY -0.1%; Commodity: Brent +0.3%, WTI +0.4%; Crypto: BTC +0.6%, ETH +4.8%.

Asia

- Australia Oct Trade Balance (A$): 4.4B v 4.5Be; Exports M/M: 3.4% v 7.6% prior; Imports M/M: 2.0% v 1.8% prior.

- Australia Oct Household Spending M/M: 1.3% v 0.6%e; Y/Y: 5.6% v 4.6%e.

- Japan sold 30-year JGB Bonds; Avg Yield: 3.4270% v3.1660 % prior; bid-to-cover: 4.04x v 3.12x prior (highest b/c since 2019); yilds lower by 5bps.

- PBOC Gov Pan: op-ed article noted that China must maintain "prudent" monetary policy (prior "moderately loose"). Comes ahead of the Dec Politburo meeting and annual CEWC that originates key economic targets.

- BOJ Gov Ueda reiterated view that could only estimate neutral rate with wide range thus far, could not specify terminal rate (**Note: dealers interpreted as indicating that the central bank has significant room to raise rates before they cease to be simulative).

- Japan Fin Min Katayama reiterated to guide fiscal policy mindful of need to maintain market trust in our finances.

- Japan Chief Cabinet Sec Kihara: Long-term rate moves determined by markets; Concerned about forex moves.

- France’s Macron began his state visit in China, while Russian President Putin is scheduled to arrive in India.

Americas

- Pres Trump stated that was terminating Biden-era auto standards, incl EPA's tailpipe emission standards.

- Treasury Sec Bessent confirmed 'things going very well' with China and Taiwan; Remainder of President Trump term would be 'good' with China.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.28% at 577.84, FTSE +0.05% at 9,696.87, DAX +0.79% at 23,869.51, CAC-40 +0.40% at 8,119.55, IBEX-35 +0.44% at 16,658.61, FTSE MIB +0.07% at 43,411.00, SMI +0.32% at 12,896.70, S&P 500 Futures +0.09%].

Market focal points/key themes: European indices opened generally higher, but lost momentum in the early part of the session; markets eyeing central bank speakers ahead of next week’s packed rate decision schedule; better performing sectors include technology and industrials; while materials and health care sectors underperform; earnings expected during the upcoming Americas session include Hormel Foods, Hewlett Packard and SAIC.

Equities

- Consumer discretionary: Watches of Switzerland [WOSG.UK] -0.5% (earnings), Baltic Classifieds [BCG.UK] -18.5% (earnings).

- Industrials: Balfour Beatty [BBY.UK] +1.5% (trading update).

- Technology: ASML [ASML.NL] +0.5% (Cambricon aims to triple chip production to replace Nvidia in China in 2026), SAP [SAP.DE] +1.5% (Salesforce results), Future [FUTR.UK] +7.5% (earnings; buyback).

- Materials: Rio Tinto [RIO.UK] +0.5% (CMD).

Speakers

- ECB's Cipollone (Italy) reiterated Council stance that was taking decisions meeting-by-meeting but ready to react to any shock. Risks to inflation seen balanced but still many risks in the pipeline. Economy has been resilient.

- Bank of England (BOE) Decision Maker Panel (DMP) Nov Survey maintained 1-year ahead CPI at 3.4% (3.3%e) while raising 3-year ahead CPI from 2.9% to 3.0%.

- Russia Pres Putin stated that the meeting with Witkoff and Kushner was useful; Russia would take control of Donbas by military means or otherwise; Search for solution to Ukraine crisis was a difficult task.

Currencies/fixed income

- USD remained on soft footing as rate divergence play remained in effect.

- The session saw a firmer JPY currency (Yen) after reports circulated that BOJ would likely raise interest rates at the upcoming Dec meeting and that Japan govt officials were expected to 'tolerate' such a move. USD/JPY moved below 155 level in the session.

- EUR/USD approaching the 1.17 area as ECB members continued to tout that current level of rates was appropriate.

- China state-owned banks seen buying US dollars and tweak their trading style to blunt Chinese yuan (CNY) gains.

- 10-year German Bund yield at 2.76%, France 10-year Oat at 3.50% and 10-year Gilt yield at 4.46% 10-year Treasury yield: 4.09%.

Economic data

- (SE) Sweden Nov Preliminary CPI M/M: -0.4% v -0.2%e; Y/Y: 0.3% v 0.5%e.

- (SE) Sweden Nov Preliminary CPIF M/M: -0.2% v -0.1%e; Y/Y: 2.3% v 2.5%e.

- (SE) Sweden Nov Preliminary CPIF (ex-energy) M/M: -0.6% v -0.3%e; Y/Y: 2.4% v 2.6%e.

- (SE) Sweden Q3 Current Account Balance (SEK): 93.2B v 98.0B prior- (HU) Hungary Oct Retail Sales Y/Y: 3.1% v 3.0%e.

- (TH) Thailand Nov Foreign Reserves w/e Nov 28th: $274.7B v $270.3B prior.

- (CH) Swiss Nov Unemployment Rate: 2.9% v 3.0%e; Unemployment Rate (adj): 3.0% v 3.0%e.

- (CZ) Czech Nov Preliminary CPI M/M: -0.3% v 0.1%e; Y/Y: 2.1% v 2.5%e.

- (CZ) Czech Q3 Average Real Monthly Wage Y/Y: 4.5% v 5.1% prior; Nominal Monthly Wage Y/Y: 7.1% v 7.6% prior.

- (DE) Germany Nov Construction PMI: 45.2 v 42.8 prior.

- (CH) Swiss Nov PMI Manufacturing: 49.7 v 48.9e; PMI Services: 45.3 v 47.8 prior.

- (UK) Nov New Car Registrations Y/Y: -1.6% v +0.5% prior.

- (ZA) South Africa Q3 Current Account Balance (ZAR): -57B v -72B prior; C/A as a % of GDP: -1.0% v -1.2%e.

- (IS) Iceland Q3 Current Account Balance (ISK): +26.9B v -110.4B prior.

- (UK) Nov Construction PMI: 39.4 v 44.6e (11th month of contraction, lowest since May 2020).

- (EU) Euro Zone Oct Retail Sales M/M: 0.0% v 0.0%e; Y/Y: 1.5% v 1.3%e.

- (CY) Cyprus Nov CPI M/M: % v 0.5% prior; Y/Y: % v -0.3% prior.

- (GR) Greece Q3 Unemployment Rate: % v 8.6% prior.

Fixed income issuance

- (ZA) South Africa to sell USD-denominated 12-year and 30-year bonds via syndicate.

- (ES) Spain Debt Agency (Tesoro) sold total €2.88B vs. €2.5-3.5B indicated range in 2030 and 2037 SPGB bonds.

- (ES) Spain Debt Agency (Tesoro) sold €481M vs. €250-750M indicated range in 1.15% Nov 2036 inflation-linked bonds (SPGBei); Real Yield: 1.469% v 1.392% prior; bid-to-cover: x v 2.38x prior.

- (FR) France Debt Agency (AFT) sold total €5.06B vs. €3.5-5.5B indicated range in 2035, 2040, 2041 and 2055 Bonds.

- (UK) DMO sold £1.0B in 4.25% 2039 Gilts via tender ; Avg Yield: 4.813%; bid-to-cover: 3.88x.

Looking ahead

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills.

- 05:40 (UK) BOE 7-day short-term repo operation (STR).

- 06:00 (IE) Ireland Q3 Final GDP Q/Q: No est v -0.1% prelim; Y/Y: No est v 10.5% prelim.

- 06:00 (IE) Ireland Q3 Current Account Balance: No est v €19.5B prior.

- 06:00 (ZA) South Africa Oct Electricity Production Y/Y: No est v -5.7% prior; Electricity Consumption Y/Y: No est v -7.9% prior.

- 06:30 (TR) Turkey Nov Real Effective Exchange Rate (REER): No est v 71.87 prior.

- 07:00 (BR) Brazil Q3 GDP Q/Q: 0.2%ev 0.4% prior; Y/Y: 1.7%e v 2.2% prior; GDP 4 Quarters Accumulated: 2.6%e v 3.2% prior.

- 07:00 (MX) Mexico Oct Leading Indicators M/M: No est v 0.2 prior.

- 07:00 (CL) Chile Oct Nominal Wage Y/Y: No est v 5.9% prior.

- 07:30 (US) Nov Challenger Job Cuts: No est v +153.1K prior; Y/Y: No est v 175.3% prior.

- 07:45 (UK) BOE’s Mann.

- 08:00 (IT) ECB’s Cipollone (Italy).

- 08:00 (RU) Russia Gold and Forex Reserve w/e Nov 28th: No est v $729.1B prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:30 (US) Initial Jobless Claims: 220Ke v 216K prior; Continuing Claims: 1.96Me v 1.960M prior.

- 08:30 (US) Weekly USDA Net Export Sales.

- 09:00 (PL) Poland Central Bank (NBP) Gov Glapinski post rate decision press conference.

- 10:00 (US) Sept Factory Orders: 0.3%e v 1.4% prior; Factory Orders (ex-transportation): No est v 0.1% prior.

- 10:00 (US) Sept Final Durable Goods Orders: No est v 0.5% prelim; Durables (ex-transportation): No est v 0.6% prelim; Capital Goods Orders (non-defense/ex-aircraft): No est v 0.9% prelim; Capital Goods Shipments (non-defense/ex-aircraft): No est v 0.9% prelim.

- 10:00 (CA) Canada Nov Ivey Purchasing Managers Index (PMI): No est v 52.4 prior; PMI (unadj): No est v 51.7 prior.

- 10:00 (CO) Colombia Oct Exports: $4.3Be v $4.6B prior.

- 10:30 (US) Weekly EIA Natural Gas Inventories.

- 10:00 (IE) ECB’s Lane (Ireland, chief economist).

- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.

- 12:00 (US) Fed’s Bowman.

- 13:00 (ES) ECB’s De Guindos (Spain).

- 13:00 (BR) Brazil Nov Trade Balance Monthly: $5.5Be v $7.0B prior; Exports: $28.8Be v $32.0B prior; Imports: $23.3Be v $25.0B prior.

- 18:00 (KR) South Korea Oct Current Account Balance: No est v $13.5B prior; Balance of Goods (BOP): No est v $14.2B prior.

- 18:30 (JP) Japan Oct Household Spending Y/Y: 1.0%e v 1.8% prior.

- 20:00 (PH) Philippines Nov CPI M/M: 0.3%e v 0.1% prior; Y/Y: 1.7%e v 1.7% prior.

- 22:00 (ID) Indonesia Nov Foreign Reserves: No est v $149.9B prior.

- 23:30 (IN) India Central Bank (RBI) Interest Rate Decision: Expected to cut Repurchase Rate by 25bps to 5.25%.

- 23:30 (JP) Japan to sell 3-Month Bills.