Markets Report - 11 December 2023

A daily breakdown of the markets for the 11th December 2023, provided to you by Sterlex.

🇪🇺💶If the ECB can contain inflation going forward, a weaker EUR could help support the reforms needed to boost the competitiveness of the EU. Furthermore, expectations point toward a commencement of interest rate cuts by the ECB in March 2024. The German inflation data, as measured by the Harmonized Index of Consumer Prices (HICP) came in at 2.3%, in line with the market consensus. At the centre of these concerns is the stagnating German economy. ECB will maintain the Main Refinancing Operations Rate at 4.5% in its upcoming monetary policy statement on Thursday. The markets anticipate that the European Central Bank (ECB) will hold interest rates until inflation will return to target in a timely manner and will start to cut interest rates in March 2024. The European Commission is currently focused on improving the competitiveness of the EU.

🇬🇧💷The Bank of England (BoE) governor Andrew Bailey said last month it was far too early to be thinking about rate cuts while warning there was “no room for complacency” on inflation despite a fall in the Consumer Price Index from 6.7% in September to 4.6% in October. The BoE is likely to keep borrowing costs at a 15-year high at its December meeting on Thursday. Market players will keep an eye on the UK employment data, including Employment Change, Claimant Count Change, and ILO Unemployment Rate, due on Tuesday

🇺🇸 🏦The US Dollar (USD) Index snapped a three-week losing streak as the upbeat November jobs report helped the currency preserve its strength heading into the weekend. Nonfarm Payrolls (NFP) in the US rose by 199,000 and the Unemployment Rate declined to 3.7% from 3.9%, the US Bureau of Labor Statistics reported on Friday. Meanwhile, the benchmark 10-year US Treasury bond yield continues to fluctuate above 4.2% and US stock index futures trade modestly lower on the day. Early Monday, the USD Index holds steady at around 104.00.