Markets
Friday’s dip buyers were rewarded by yesterday’s buoyant market conditions, especially in the US. The EuroStoxx50 was still in doubt (+0.25%), but main US indices gained 1.55% (S&P) to 2.7% (Nasdaq). If they manage to take out last week’s high, it would help put to bed fears of a developing sell-on-upticks market. The jury remains out, but stars seem to be aligning in what some hope for: a fresh rally into Christmas. US money markets trade more and more in line with our preferred December Fed rate cut scenario (75% probability). Missing US eco data suggest room for the divided committee to push through one final “risk management” rate cut to bring the policy rate closer to/in neutral territory which is where you want to be as a central bank when conflicting forces on your dual mandate call for different action. Lower rates for downside employment risks and higher rates for upside inflation risks. It’s clear now that the US government will limit data releases to outdated September numbers with new figures (October and/or November payrolls/CPI; Q3 US GDP) all packed between the Dec 10 Fed gathering and Christmas. On a geopolitical front, investors take some comfort by the fact that US President Trump and his Chinese counterpart Xi Jinping are back on speaking terms. After their first in-face encounter since Trump’s first tenure ended in an extension of the trade truce by one year, both men yesterday spoke by phone to further discuss hot topics like fentanyl, soy beans, but also the Russian war in Ukraine. This weekend’s high-stake talks in Geneva gave peace negotiations some fresh momentum. An initial US-brokered 28-point proposal was reduced to a new 19-point plan by the US & Ukraine. Key US and Russian negotiators began talks in Abu Dhabi last night which are set to continue today.
Today’s eco calendar contains September US retail sales and PPI numbers, November Richmond Fed manufacturing index and November consumer confidence. We don’t expect them to really shift market sentiment with regard to the Fed. The faith of the US tech/AI comeback is probably key for overall sentiment in the shortened US trading week (Thanksgiving on Thursday). In FX space, the (trade-weighted) dollar keeps bumping into first important resistance around 100.25. EUR/USD holds steady in the low 1.15-area, but the downside is still vulnerable.
News & Views
The European Automobile Manufacturers’ Association (ACEA) this morning published monthly European car registrations data. Car registrations in the EU in October were 5.8% higher compared to the same month last year. YTD registrations over the Jan-October period were higher by 1.4% Y/Y, slightly up from 0.9% in the previous month. Despite recent positive momentum, ACEA indicates that overall volumes remain far below pre-pandemic levels. The market share of battery electric cars reached 16.4% YTD, up from a low baseline in the Jan-Oct period of 2024, but ACEA assesses that this is still below the pace needed at this stage of the energy transition. The largest four markets in the EU, which together account for 62% of battery-electric car registrations, saw gains: Germany (+39.4%), Belgium (+10.6%), the Netherlands (+6.6%), and France (+5.3%). Hybrid-electric vehicles lead as the most popular power type choice among buyers (34.6% share YTD), with plug-in hybrids ( 9.1%) continuing to gain momentum. The combined market share of petrol and diesel cars fell to 36.6%, down from 46.3% over the same period in 2024. By the end of October 2025, petrol car registrations declined by 18.3%, with all major markets experiencing decreases.
Over the previous days, US Commerce Secretary Lutnick revived a US demand for the EU to make its regulation of the tech sector more balanced. This could be the basis for the US to reduce its 50% levy on EU-imports of steel and aluminum. However, representatives of the European Commission already indicated that the EU digital rulebook is not up for negotiation as the regulation is seen as ensuring “fair markets and to protect consumers rights while ensuring Europe’s digital future”. The US also wants the EU to resolve legal cases against big US tech corporations which the US interprets as a kind of non -tariff barrier. Europe from his side tries to convince the US that its rules are not discriminatory and don’t target US companies. The debate comes as the EU is concerned on the scope of goods that the US keeps under the 50% metals regime, potentially undermining the broader trade agreement that was reached in July.
