Markets
A flurry on smaller items had the potential to revive the single currency, but the European currency lacks the power and the heart to make any significant headway. Positive risk sentiment is the obvious first one with the EuroStoxx 50 currently rising 0.3%, visiting unchartered territory with the exception of a brief spell on November 12-13. Positive surprises in eco data counted as a second factor. October German factory orders increased by 1.5% M/M, beating 0.3% consensus. The second reading of EMU Q3 GDP showed an ever more resilient economy with the growth pace upwardly revised from 0.2% Q/Q to 0.3% Q/Q on the back of stronger household consumption (+0.2%), government spending (+0.7%) and investments (gross fixed capital formation +0.9%). Finally, the German government avoided a humiliating defeat with the approval of the pension bill. In the run-up to the vote, 18 CDU members threatened to vote against the bill, stripping the coalition of its majority. Eventually, the CDU/SPD mustered 318 votes in 630-parliament with 7 ruling lawmakers voting against, two abstaining and one not casting a vote. European yields trade around 1 bp higher across the curve today with EUR/USD going nowhere at 1.1650. On the US side of the story, there’s even less to talk about with markets counting down to Wednesday’s FOMC meeting.
The Belgian debt agency today published its Borrowing Requirements & Funding Plan for 2026. The BDA expects the 2026 gross borrowing requirements of the federal government to amount to €59.55bn, up from €53.65bn this year. Next year’s net financing requirement would amount to €26.37bn, taking into account the recent budgetary decision of the federal government for 2026-2029. OLO redemptions stand at €28bn. To finance these needs, the BDA mainly relies on long term funding. They look to issue €51.6bn of OLO’s, representing a €5.9bn increase compared to this year’s €45.7bn. Three new syndicated fixed rate deals are planned. The BDA has the intention to issue a new 10-yr benchmark, a new 5-yr benchmark, and one new OLO in a long maturity (obviously depending on market conditions). It does not anticipate launching a new Green OLO in 2026. The EMTN/Schuldscheine programmes, state notes and an increase in short term debt (Treasury Certificates) will complement the OLO funding. The average life of the Belgian debt portfolio reached 10.00 years as per 30 November 2025 (from 10.50 years at the start of the year), and the duration amounted to 7.44 years (from 8.44 years). The implicit cost of the portfolio was 2.01% in November (from 1.94%). In 2026, the average life of the debt portfolio will again be required to exceed 9.25 years.
News & Views
The FAO world food price index dropped for the third consecutive month in November (-1.2% M/M & -2.1% Y/Y), with all subindices except cereal declining. The cereal subindex rose 1.8% M/M (-5.3% Y/Y). Despite a generally comfortable supply outlook and reports of good harvests in Argentina and Australia, global wheat prices rose by 2.5 M/M in November, albeit from levels last seen in the first half of 2020. The Vegetable Oil Price Index dropped 2.6% M/M, reaching a five-month low, reflecting lower prices of palm, rapeseed and sunflower oils, more than offsetting a slight increase in soy oil. The picture in the meat price index was mixed (-1% M/M but up 4.9% Y/Y). Diary prices (-3.1% M/M and -2.4% Y/Y) recorded declines across all major dairy commodities, stemming from rising milk production and abundant export supplies in key producing regions. The Sugar Price Index declined 5.9% M/M and 29.9 Y/Y, reaching the lowest level since December 2020. Expectations of ample global sugar supplies in the current season continued to exert downward pressure on prices.
The Canadian economy added 53.6k jobs in November. After strong gains (>60k) in September and October, the market expected a slight drop. November gains were driven by part-time employment (63k). Full-time employment eased slightly (-9.5k). Job gains were mostly registered in the services sector (42.8K). Still goods-producing activities also contributed positively (11k). The unemployment rate dropped from 6.9% to 6.5%, but this was partially due to a decline in the labour force and the participation rate. Hourly wage growth was unchanged at 4%. The 2-y Canadian government bond yield jumps 14 bps to 2.6% after the release, strengthening believe that the Bank of Canada has ended its easing cycle (at 2.25%).The loonie strengthens from USD/CAD 1.395 to 1.389.
 in September and October, the market expected a slight drop. November gains were driven by part-time employment (63k). Full-time employment eased slightly (-9.5k). Job gains were mostly registered in the services sector (42.8K).){kind=link}