It’s been a solid start to December for European markets pushing up to 6-month highs, although gains are being tempered as we head into the close, with the FTSE100 lagging.

The mood has been enhanced by the reaction to Fed chairman Powell’s comments on the potential for a dialling down of the pace of rate hikes when the FOMC next meets in just under a fortnight’s time, however the gains are being tempered by concerns over the extent of some of the economic data weakness being seen today.

The drag on the FTSE100 is being led by the likes of Shell and BP, both of which are lower despite a rise in oil prices. The recent strength of the pound may be a factor here, acting as a drag on those big US dollar earners.

We’re also seeing some end of week weakness in the likes of HSBC, Standard Chartered and Prudential which appear to be succumbing to some profit taking after the strong gains seen in the past two days.

Digital education provider Pearson is also lower after being downgraded by Exane.

On the plus side Ocado is higher after its US digital partner, Kroger upgraded its full year profits outlook, helped by a solid rise in digital sales.


US markets initially opened higher after the latest core PCE inflation numbers showed that inflation continued to moderate in October, while weekly jobless claims fell to 225k.

While these gains appear to have given way to some profit taking, the underlying narrative of a softer inflation and growth outlook appears to be being supported by this afternoon’s US data.

This combination of softer inflation as core prices rose by 0.2% in October, and 5% year on year, shows that the Fed doesn’t need to be any more aggressive than it already has hinted it will be, pushing the US dollar lower in the aftermath of Fed chair Powell’s comments yesterday.

This peak inflation, softer growth narrative was reinforced by the ISM manufacturing survey which fell into contraction territory for the first time since May 2020, while prices paid fell to 43, and employment also contracted at 48.4.

Salesforce shares have slipped back sharply after it was announced that Co-CEO Bret Taylor would be stepping down at the end of January. On the Q3 numbers themselves both revenues and profits beat expectations , coming in at $7.84bn and profits of $1.40c a share. On revenue guidance for the full year, this was kept tweaked slightly lower to between $30.9bn to $31bn, down from $31bn, along with its Q4 guidance which came in between $7.93bn to $8.03bn. Full year profits are expected to come in between $4.92c to $4.94c a share. 

Snowflake shares have also fallen after missing expectations on guidance. Q3 revenues came in better than expected at $557m, however Q4 forecasts of $535m to $540m was below the $551.8m expected. Full year revenues were kept unchanged at $1.92bn, while full year operating margins are forecast to rise by 3%.

Kroger shares have moved higher after the Ohio based grocer raised its full year outlook for profits to $4.15c a share, from the previous $4 a share, as Q3 sales came in at $34.2bn, above expectations of $33.98bn, while profits rose to $0.88c a share. Q3 same store sales rose 6.9%, with digital sales rising by 10%. For the full year like for like sales are expected to rise by 5.2%.


The Japanese yen has been one of the main beneficiaries of last night’s comments by Fed chair Jay Powell pushing to its highest levels since the end of August but has also been helped by today’s US economic data which showed that inflationary pressures continued to moderate in October.

The pound has also continued to recover lost ground, both against the US dollar, and the euro, and on course to close above its 200-day SMA for the first time since September 2021, and up to 1.2300, in a sign that could open a move towards the 1.3000 level in the coming months. Who would have predicted that a few weeks ago?

The euro is also higher although it has lagged a little after German retail sales plunged in October by -2.8%, as German consumers retrenched in the face of higher prices. The latest November manufacturing PMI numbers also came in below expectations at 46.2, although it was still an improvement on the numbers in October.   


It’s been another day of gains for crude oil prices on the back of a weaker US dollar and the hope that in slowing easing Covid restrictions, the Chinese government will prevent a sharp slowdown in demand for the Chinese economy. A softening in inflationary pressure is also good news for hard pressed consumers which may also be helping on the margins.

The slide in yields and the weaker US dollar has seen gold prices push above their November highs as well as the 200-day SMA where we have the $1,800 level as it looks to break out of the downtrend that’s been in place since those March peaks.


The USD/CAD trade remained in focus on Wednesday with the pair’s recent gains off the back of Canadian economic weakness being undermined by that dovish note from the Fed chief, who suggested that more tempered rate hikes could start as soon as the next FOMC meeting this month. The greenback lost more than a cent and a half against the Canadian Dollar as a result, driving one day volatility to 12.17% against 10.15% on the month.

Energy prices continued to advance with that theme of the imminent OPEC meeting still dominating. RBOB Gasoline hit fresh highs for the week, adding more than 4% over the session, pushing one day volatility out to 50.32% compared with a one month print of 45.05%.

Elevated levels of price action across the oil and gas sector are playing out in the Norwegian stock market too, with the Norway 25 proving to be the standout in terms of equity indices. Part of this may be the result of some erratic action early in yesterday’s session where losses were marked but short lived. One day vol printed 29.49% against 26.88% on the month.

And HSBC continues to see heightened levels of activity following news earlier in the week of that sale of its Canadian division. An erratic session saw the share price recover its early losses, finishing Wednesday’s trade slightly higher. One day volatility stood at 70.46% against 36.96% on the month..

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