US GDP, durable goods, and consumer confidence due

European markets are floundering in early trade, with losses for the likes of the Ibex and CAC accompanied by tentative gains for the FTSE 100 and DAX. Coming off the back of a period of strength that has seen the DAX gain 4% in a month, European stock markets appear to have entered a period of consolidation as we head into the final trading days of 2025. Nonetheless with the Santa rally period traditionally taking place over the final five days of the year investors will be hoping that the bulls are gathering momentum for a final push tomorrow onwards. With data relatively thin on the ground in Europe, the focus will instead be on the US given the impending release of GDP, core durable goods, and consumer confidence figure.

The Japanese Yen has enjoyed a sharp bout of buying pressure this morning, as traders react to commentary from the Finance Minister who claimed she has a “free hand” in addressing the excessive currency volatility. Coming as USDJPY approached 158, we are trading at levels that have previously seen the government intervene in a bid to stem selling pressure for the yen. Notably, with the 10-year yield having reached record highs this week, concerns around fiscal sustainability in the face of rising spending under the new PM have dented sentiment for the yen despite the BoJ rate hike. Quite whether we do see intervention remains to be seen and those in the markets long enough will also remember that the success of those previous efforts to strengthen the yen have often been relatively short-lived.

Today sees a raft of notable US data points released, with the second quarter GDP revision coming alongside core durable goods and consumer confidence metrics. Notably while we are expecting the latest GDP revision to decline from 3.8% to 3.3%, there still remains a healthy trajectory given the hurdles faced by the economy amid tariff uncertainty and rising unemployment. With the latest Atlanta Fed GDPNow estimate putting GDP around 3.5% for Q3, this is just another reminder that the questionable figures in the jobs market doesn’t necessarily tally up with a recession for businesses. Meanwhile, traders will be keeping a close eye out for the latest consumer confidence survey which provides one of the earliest indications of health within the jobs market.