Key Market Updates 1. The US ISM Manufacturing PMI fell 0.5 points to 48.2 in November, marking the ninth consecutive month below the 50 threshold and the sharpest contraction in four months. New orders declined at the fastest pace since July, while backlogs saw their steepest drop in seven months.
2. The US ADP employment report showed the largest job loss in two and a half years, with private payrolls shrinking by 32,000 in November—far below the expected 10,000 gain—further fueling expectations of Fed rate cuts.
3. The latest inflation data supports a potential Fed rate cut in December. The core PCE price index rose 2.8% YoY and 0.2% MoM in September, aligning with forecasts. Meanwhile, real personal consumption expenditure unexpectedly stalled MoM, revised down from 0.4% to 0.2%. The University of Michigan’s 1-year inflation expectation dropped to 4.1%, the lowest since January, while the 5-year outlook fell to 3.2%. White House economic advisor Hassett suggested it’s an opportune time for the Fed to "cautiously cut rates," with action likely next week.
4. The US ISM Services PMI climbed to 52.6 in November, a nine-month high, beating expectations of 52.1. New orders slowed from a one-year peak, while price pressures eased to a seven-month low. The employment index hit a six-month high, signaling slower job declines.
5. China’s reusable Zhuque-3 rocket successfully completed its maiden flight, deploying its second stage into orbit. Although the first-stage recovery failed, the milestone underscores progress in China’s commercial space sector. The 2025 China Commercial Aerospace Forum projects the industry could reach ¥7–10 trillion by 2030, with capabilities like in-orbit spacecraft servicing and low-cost space tourism on the horizon.
6. BOJ Governor Ueda delivered the clearest rate-hike signal to date, stating the bank would "weigh the pros and cons of tightening" at this month’s policy meeting. He noted Japan’s real rates remain "significantly below natural levels," framing hikes as adjustments to easing.
Market Recap 1. Futures: - ICE Brent crude rose 2.37% to $63.86, while COMEX gold fell 0.64% to $4,227.7. Soybeans led declines, with LME copper posting the largest gain. - The USD index dropped 45.61bps amid BOJ’s hawkish tilt, lifting the CNY by 22bps and JPY by 82.35bps.
2. Equities: - A-shares edged higher, with the ChiNext Index up 1.86% (best performer) and the SSE 50 down 0.08% (worst). The equity fund index gained 0.92%. - Hong Kong’s Hang Seng rose 0.87%, and the Hang Seng Tech Index added 1.13%, buoyed by USD weakness. - US stocks rebounded: Nasdaq (+0.91%) led, while the S&P 500 (+0.31%) lagged. PCE data met expectations, but trade-war risks loom.
3. Bonds: - China’s credit bonds advanced, with 5Y AA+ up 6bps. Rates rose more at the long end (3Y CDB +5bps). - US yields climbed, led by 5Y/20Y (+13bps), as BOJ’s stance unwound carry trades. Trade tensions remain a watchpoint.
Outlook US inflation aligned with forecasts, while jobs data softened. China enters a data lull, with trade, inflation, and credit figures due. Domestic demand may stabilize on eased property policies and fertility subsidies, though global uncertainties persist. The Fed’s December cut probability holds at 86% despite BOJ-driven yield pressures.
Risks: This report derives from public sources; accuracy isn’t guaranteed. Views expressed are not investment advice. Unauthorized reproduction prohibited.
Comments