Another quiet one on the agenda in Europe today | investingLive
As we look to European trading today, major currencies are not doing all too much while equities are continuing to hold steadier going into the session ahead. US futures are up, led by tech shares, while European futures are marginally higher following the gains in Wall Street yesterday. In other markets, gold is nudging higher again after some profit-taking yesterday as geopolitical tensions made waves since overnight trading.
In US trading yesterday, we saw the BLS post the largest downwards annual revision to non-farm payrolls on record here. If anything, it’s a glaring issue that the stats bureau can be so off base in data accuracy but all that just gave easy ammunition to Trump to fire home his points about the Biden economy and the Fed falling behind the curve.
The market reaction was rather controlled, with traders still just holding on to fully pricing in a 25 bps rate cut for next week. Meanwhile, there’s ~67 bps of rate cuts priced for year-end. There’s no strong push for a 50 bps rate cut call for next week just yet, but that will have to depend on the US CPI report tomorrow.
Aside from that, we also saw a sudden attack from Israel towards Qatar overnight. Israel launched airstrikes in trying to target Hamas leaders and that’s making for a step up in geopolitical tensions in the region. For some context, Qatar has been acting as a mediator in Gaza ceasefire talks so for them to take on collateral damage is quite terrible – at least in terms of optics.
US president Trump has already expressed his displeasure about the situation with reports suggesting that Hamas leaders did manage to survive the latest attacks. The latter fact could yet provoke more attacks by Israel, so we’ll have to watch and see.
Meanwhile, we also got another notable development in the Russia-Ukraine conflict as Poland felt compelled enough to have to shoot down Russian drones which crossed into their territory. That marks a new escalation or at least a significant development since the conflict began in 2022. That as it marks the first time a NATO country has had to draw its sword to defend itself against Russia’s incursions.
For now, markets are holding calmer but this will be another spot to keep an eye out for once we start to see Russia speak more about the situation.
Looking ahead today, the main draw will be the US PPI report which will act as a bit of a litmus paper before we get to the US CPI report tomorrow.