MARKET WRAPS

Watch For:

Germany industrial production; no major corporate updates expected

Opening Call:

European stock futures were slightly lower at the start of the week. Asian stock benchmarks advanced; the dollar and Treasury yields were little changed; oil futures rose; while gold was flat.

Equities:

Stock futures point to a cautious open in Europe on Monday as markets look ahead to a number of central bank decisions, most notably by the Federal Reserve.

"Momentum is now firmly behind a third 25 basis-point easing for the year," ING economist James Knightley said. "While there is some nervousness about the potential for inflation to remain elevated due to tariff-induced price hikes, the news on the jobs market is increasingly concerning."

Investors will also pay close attention to the Fed's new rate forecasts as they look to gauge how fast and how far interest rates will fall next year.

Forex:

Markets may be less focused on Powell at this week's FOMC meeting, said DBS's Philip Wee. "The center of gravity may already have shifted towards US President Donald Trump's impending pick for Fed Chair," Wee said.

Investors are increasingly focused on the emerging shadow Fed rather than Powell's short-term guidance. The futures market has started to reflect this, with rate cuts next year being driven more by expectations of a new supply-side-oriented Fed chair, weighing on the U.S. dollar, he said.

Bonds:

Beyond an expected third Fed rate cut this week, the bull run in stocks and other risk assets could be due for a different kind of boost when the Fed wraps up its policy meeting.

A rates strategy team at BofA Global expects the Fed to announce "reserve management purchases" of Treasury bills that mature in a year or less, starting in January at a $45 billion monthly pace. "We are out of consensus early and in size," the team said.

Others think it could take more time, and for the Fed to do less to keep markets functioning smoothly.

"If you zoom out, the Fed naturally will start bill purchases next year as part of a reverses management operation," said Roger Hallam, Vanguard fixed-income group's global head of rates. "Because as the economy's demand for reserves expands, the Fed naturally will meet that."

Energy:

Commonwealth Bank of Australia's Vivek Dhar said oversupply concerns will eventually be realized, especially as Russian oil and refined product flows eventually circumvent existing sanctions, which could prompt Brent futures toward $60/bbl through 2026. "However, we will need to see evidence of growing stockpiles and further erosion of refining margins," he said.

A Russia-Ukraine cease-fire deal is a key downside to CBA's outlook, while sustained damage to Russian oil infrastructure is a key upside risk.

Metals:

Gold rose early Monday. A U.S. inflation indicator matched market expectations, supporting the case for a Fed rate cut later this week, said ANZ.

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While copper rallied to record highs last week, the base metal's prices are likely to ease next year, Capital Economics' Kieran Tompkins said.

Most of the "bad news" related to tightening supply--such as an expected modest fall in Chinese producers' output next year--have already been priced in, he said. Demand for copper is likely to be downbeat, with the correction in construction activity related to China's property sector set to remain a headwind, he added.

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Iron ore prices declined in Asia. On the supply side, cumulative global iron ore shipments in 2025 continue to rise on year, while port inventories are also building, Nanhua Futures said.

Yet, "with supply-chain tensions easing, steel mill margins improving, and rigid restocking demand for winter inventories strengthening, the downside for iron ore prices is expected to be limited," it added.

TODAY'S TOP HEADLINES

This week's Fed meeting will highlight the central bank's challenge: Preventing a recession while tackling inflation

Six weeks ago, Federal Reserve Chair Jerome Powell surprised everyone by saying that an interest-rate cut at the central bank's next meeting in December was unlikely to happen.

Now, days away from that meeting, Fed officials have clearly signaled they plan to cut rates by a quarter of a percentage point for the third straight meeting. Late last month, New York Fed President John Williams, a close ally of Powell's, said in a speech that he saw room for a further rate cut. The market took his comments as a green light for an easing.

China's Exports Rebound in November

China's exports rose more than expected in November, bouncing from October's dip and continuing to drive growth for the world's second-largest economy.

Outbound shipments in November rose 5.9% compared with the same period a year earlier, reversing from October's 1.1% drop, said the General Administration of Customs on Monday.

Putin Wanted AI Supremacy. Now Russia Is Struggling to Stay in the Race.

President Vladimir Putin has often proclaimed that Russia must lead the world in artificial intelligence. In reality, the country is stuck on the sidelines as others pull ahead.

As the U.S. and China race to dominate AI models and applications and countries in Europe and the Middle East pour resources into building computing infrastructure, the Ukraine war has derailed Russia's once lofty ambitions.

Sephora Is the Biggest Name in Beauty. Can It Hold the Crown?

Of all the Sephora stores that have gone through the beauty retailer's new redesign, the Champs-Élysées flagship in Paris is probably the most glam. There's a long red carpet, high ceilings and a giant table for everything that's trending on social media.

"They say that this store gets more visits than the Eiffel Tower," Deborah Yeh, Sephora's global chief marketing officer, says as we walk through the crowded boutique on a fall afternoon. We stroll past a fragrance section where perfume bottles stand proudly on their own tables, begging to be spritzed. Hair care has moved to the front of the store; makeover chairs, once near the front, now sit in the middle of the floor.

IBM Nears Roughly $11 Billion Deal for Confluent

International Business Machines is in advanced talks to acquire data-infrastructure company Confluent for around $11 billion, according to people familiar with the matter.

Trump Says Netflix-Warner Deal 'Could Be a Problem'

WASHINGTON-President Trump said Netflix's $72 billion deal to acquire Warner Bros. "could be a problem" because it would result in a large market share for the streaming giant, signaling possible government resistance in his first public comments about the sale.

"They have a very big market share," Trump said Sunday night of Netflix. "And when they have Warner Brothers, that share goes up a lot." He added, "I'll be involved in that decision."

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Expected Major Events for Monday

00:01/UK: Nov KPMG and REC UK Report on Jobs

06:00/FIN: Oct Foreign trade

07:00/GER: Oct Industrial Production Index

07:00/DEN: Oct Industrial production & new orders

08:00/CZE: Oct Industry, Construction

08:00/CZE: Oct External trade

08:00/SWI: Nov Consumer Sentiment Index

09:00/CZE: Nov Unemployment data

09:00/ICE: Nov External trade, preliminary figures

10:00/LUX: Nov CPI

10:00/GRE: Oct External Trade (provisional data)

11:00/FRA: Oct OECD CPI

16:59/SWI: 2Q Locational & Consolidated banking statistics

16:59/SWI: 3Q International debt securities statistics

16:59/SWI: 2Q Domestic debt securities statistics

16:59/SWI: 3Q Exchange-traded derivatives statistics

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(END) Dow Jones Newswires

December 08, 2025 00:03 ET (05:03 GMT)

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