Thursday's session on international financial markets brought significant increases in the main stock indices, declines in Bitcoin and NATGAS prices, and a sideways trend in GOLD.
At the time of writing, the US100 is up 2.7%. At the same time, the Australian dollar is dominating the FX market. The greatest downward pressure is being seen on the euro and the Japanese yen.
Investors reacted optimistically to the November inflation report, which showed a 2.7% year-on-year increase in prices (CPI) and 2.6% for core CPI, below analysts' forecasts. What's more, the market gained additional momentum after Micron Technology's strong results, which beat expectations and rose 13%, reactivating the bull market for technology companies related to artificial intelligence.
Tomorrow we will learn the BoJ's latest decision on interest rate changes. It is widely believed that the Bank of Japan will raise interest rates by 25 bp and announce a cycle of selling ETFs held on its balance sheet.
The European Central Bank (ECB) left key interest rates for the Eurozone unchanged today (deposit rate: 2%). The decision was in line with the consensus. Investors' attention was drawn to the upward revisions to inflation and GDP forecasts for 2026, indicating growing optimism about the state of the Eurozone economy at the ECB.
The tone of Christine Lagarde's narrative remains neutral and reaffirms the current level of monetary policy in the Eurozone. The ECB expects a slightly more dynamic rebound in economic activity in the Eurozone, mainly due to greater consumer confidence, real wage growth, and a decline in the very conservative savings rate. The outlook for inflation, while stable, remains uncertain as rising pressure in services is offset by falling prices for goods. The EURUSD exchange rate retreated slightly after a strong breakout triggered by a much lower-than-expected US inflation reading.
Under pressure from a weakening economy and lower inflation, the Bank of England cut interest rates by 25 basis points at today's conference, which was in line with market expectations. However, the statement accompanying the cut was unexpectedly hawkish, especially given market sentiment and the macroeconomic environment in the UK.
As expected, Norges Bank kept interest rates unchanged. The main rate is currently 4.0%. Norges Bank has made minor changes to its economic forecasts, although these do not significantly alter the overall macroeconomic picture.
Data from the Central Statistical Office (GUS) provided insight into the employment and industrial situation in Poland, from which a number of conclusions can be drawn. The most striking is the decline in industrial production, which fell significantly below expectations at 2.7%. Employment fell by 0.8% year-on-year, but this decline was smaller than the market had expected. On the other hand, wages rose above expectations, by 7.1% compared to the expected 6.3%. This means that the labor market situation improved at the end of the year. This data allows the NPB to maintain its current policy of stimulating the economy through interest rate cuts, but policymakers must closely monitor the pace of wage growth to avoid a renewed price-wage spiral.
NATGAS has had a tough session. Contracts continue their technical decline below the 200-day EMA, losing nearly 10% today alone (after contract rollover). The EIA gas inventory reading was slightly lower than forecast, which means that demand was slightly overestimated.
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