Data Calendar Before Christmas: Minimal data releases before Christmas, with a focus on NIER’s December survey in Sweden, particularly scrutinizing retail trade and private services price plans for signs of moderation.
Norwegian Unemployment Rate: Release of the unemployment rate for December in Norway.
Japanese Inflation: Overnight, the November inflation print from Japan is anticipated, with consensus expecting headline inflation to fall to 2.8% y/y from October’s 3.3%.
Risk Sentiment Shift: Unexpectedly weakened risk sentiment observed, marked by lower equities, falling yields, and a resurgent USD, contrasting the previous week’s rally following the FOMC meeting.
EU Fiscal Rules: EU economy and finance ministers agree on new fiscal rules, featuring stricter spending limits, allowances for key EU priorities, and tougher enforcement, potentially leading to a tighter fiscal stance in the EU next year.
Equities Performance: Global equities experienced a downturn, with the US cash session turning sharply negative in the afternoon. The drop is attributed to profit-taking after a strong rally in previous sessions.
Fixed Income: European yields saw a decline across the board, with 10y Bund yields falling below the 2% mark. Intra-euro area spreads remained stable.
FX Markets:EUR/USD slightly lower, trading in the mid-1.09s. EUR/GBP maintains gains after the UK inflation surprise. USD/JPY continues lower, while NOK/SEK gives up recent gains as EUR/NOK recovers.
Credit Markets: December holiday slowdown observed in the credit market, with limited new issue activity and minor changes to spreads.
This overview provides a snapshot of the global financial landscape, encompassing major market movements, upcoming data releases, and key events.